When running a small business, the need for finance is crucial. There are different financing options that you can opt for. However, the easiest of all is a personal loan. A personal loan requires minimal paperwork and has simple eligibility criteria, unlike any other business loan. It does not require collateral or any other form of guarantee. You can simply download a money loan app and apply for a small-ticket loan ranging from Rs. 50,000 to Rs. 1.5 lakh.
Today, you can easily apply for an online loan with minimal paperwork and get an instant loan approved and disbursed within 2 to 7 business days. These loans come with zero restriction to end-use which means you can use the loan amount to accommodate a wide range of business expenses.
The Role of Personal Loans in Financing A Small Business Venture
Personal loans are an easy, convenient and secure way of financing small business ventures. With the advent of money loan apps and online lending websites, you can easily get a personal loan to accommodate your business expenses.
The loan amount from a personal loan can be put to use in different ways in your business. Here are some of the benefits of using a personal loan for your business-
- It is an usecured loan
Personal loans are unsecured loans which means you do not require to provide security against the loan. Most small business ventures do not have the requite assets to offer as collateral. In such cases, you can opt for a personal loan that does not need collateral. Make sure to research your options to avail a quick loan with the lowest interest rates and better loan terms.
- Fewer documents and faster processing
The disbursal of a business loan typically takes longer since there are a lot of documents that the lender needs to verify. However, the disbursement process for unsecured business loans is very simple and quick. This is because when you apply for a loan through a money loan app, you require minimum documents. The app uses advanced AI and machine learning to verify these documents within seconds. Thus, your loan gets approved within minutes and the disbursal is processed within a day or two.
- Flexible Tenure
Personal loans are available with flexible repayment terms. The typical payback period for financial institutions is between 12 and 60 months. The flexible tenure enables you to pay off your outstanding debt at your convenience. Also, you can maintain a positive cash flow thanks to the shorter and more flexible loan terms.
- Affordable Interest Rates
With increased market competition, today personal loans are offered to borrowers at a much more affordable rate. Thus, if you are not qualifying for other types of business loans or you want instant cash, then a personal loan is your best pick.
- Easy repayment
Personal loans are designed to help borrowers fulfil their financial obligation without feeling the burden of a lump sum payment. You can easily accommodate the personal loan EMI amount in your monthly expenses. Thus, a personal loan can help you keep your small business afloat by providing the necessary influx of funds.
When should you avail a personal loan for your small business venture?
Here are some of the situations in which availing a personal loan for your business venture would make sense:
- You are yet to get all the business paperwork done.
- Your business is not qualifying for the business loan schemes offered by the government.
- You do not have the needed experience in your business to opt for a business loan.
- You do not have the collateral to pledge for a secured loan.
- You do not want to share equity.
- You have already exhausted your option of asking your friends or family for a loan.
Important business loan schemes by the government:
- MSME Loan Scheme
- Credit Guarantee Fund Scheme
- MUDRA Loan
- Credit Link Capital Subsidy Scheme
- National Small Industries Corporation Subsidy
- SIDBI Loan
- Start-up India Loan scheme
- Bhartiya Mahila Bank Business Loan
Conclusion
Getting the appropriate money at the right moment is essential for a small business venture. Unsecured business loans are widely available and have several advantages, including no requirement for collateral, low-interest rates, and large loan amounts. Another major advantage is that you can apply for a personal loan using a money loan app. Many lenders provide rapid loans with a simple and quick loan application process.
Applying for an online loan for business needs is simple and easy due to the quick and minimum documentation process. All you need to do is download the app, sign up, and provide the necessary documents to get your loan accepted. Moreover, due to the absence of collateral, the distribution process is made simpler and less time is spent appraising assets.
