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December 19, 2022

Unsecured Business Loan – Why is it the Ideal Option for MSMEs in India?

    • December 19, 2022
    • By Team Kinara
    • < 1 mins read

    MSME Loan

    Introduction

    An unsecured Business Loan is a loan granted to businesses based on the borrower's credit history, age, turnover, KYC & income verification, etc., rather than a guarantee or property collateral. This kind of loan is mostly availed of by small business entrepreneurs who utilise them to cover various business-related expenses such as renovating business premises, purchasing raw materials, increasing working capital, repairing machinery, hiring more workers, adding new product lines, etc.

    MSMEs in India lack access to formal credit even though they significantly contribute to the Indian economy. There are approximately 6.3 crore MSMEs in the country. The sector contributes about 30% towards the GDP and almost 50% to exports, but most MSMEs need help accessing finance to grow their businesses. They face high loan rejection rates from traditional lenders like banks because many of them are new to credit, therefore lacking credit history, and often don’t have collateral to pledge against a loan. This issue can be resolved for MSMEs through unsecured business loans, termed as collateral-free loans, from NBFCs like Kinara Capital.

    What is Secured Business Loan?

    Small businesses frequently access secured business loans as a source of funding. This kind of loan is secured by a personal guarantee or by the pledge of assets or property. Using the collateral, the borrower can reassure the lender that they will return the loan amount within the timespan in the loan agreement. It also suggests that if the borrower can’t repay the loan on time, the lender has the right to seize the collateral. There are basically two types of secured business loans, that is: “Secured by Collateral” and “Secured by Personal Guarantee”.

    • Secured by Collateral - This secured business loan includes pledging a Property Mortgage, Fixed Deposit Certificates, Savings Accounts, Government Securities, Gold, etc.
    • Secured by Guarantee - Business owners can also get Secured Loans based on a guarantee. This means a third person promises to repay the loan if in case the borrower defaults on it.

    Here are a few differences between Secured and Unsecured Business Loans.

    Difference Between Secured Loans and Unsecured Loans

    1. Unsecured Business Loans do not require collateral, while secured loans need to be taken against asset collateral.

    2. Since unsecured loans do not require pledging collateral, their interest rates are comparatively higher than secured loans.

    3. Secured loan amounts depend on the value of the collateral, whereas unsecured loan amount depends mainly on your credit score, turnover, KYC & income verification, etc.

    4. Unsecured loans are sanctioned faster as there is no need to go through asset-related documents.

    Why should you choose Kinara Capital For Unsecured Business Loans?

    In a sector that is constantly in need of speedy business financing, Kinara Capital is focused on helping businesses of all sizes get the finances they need in the form of unsecured business loans at the right time. Features such as no collateral, minimal paperwork, quick approvals and loan disbursals in 24-hours and doorstep customer services make Kinara popular and stand out from financing lenders. Kinara understands the value of adequate business finance and offers tailored solutions for MSMEs that cater to the unexpected or planned needs of growing organisations.

    Here are a few benefits of acquiring Unsecured Business Loans from Kinara Capital.

    Benefits of Unsecured Business Loans from Kinara Capital

    • Collateral-free Business Loans - Kinara Capital provides Unsecured Business Loans to help MSMEs to accelerate their business growth. All registered MSMEs from the manufacturing, trading, and services sectors can apply for unsecured Business Loans without pledging any property collateral.
    • Minimal documentation - Kinara provides loans with minimal documentation so you can instantly get Business Loan approval online. You can focus on the optimum utilisation of capital to fulfil your business goals without going through the time-taking documentation procedures.
    • Sizable sanction up to ₹30 lakhs - Kinara Capital provides Business Loans from ₹1 Lakh to ₹30 Lakhs to Registered MSMEs from Andhra Pradesh, Telangana, Karnataka, Gujarat, Maharashtra, Tamil Nadu or UT Puducherry.
    • Hassle-free, online application provision - You can easily get Unsecured Business Loans online through Kinara Capital's myKinara App. It will let you experience a quick and convenient method of acquiring a Business Loan with easy approval and have the entire sanctioned amount disbursed within 24-hours.
    • Doorstep Customer Service - Kinara also provides doorstep customer services to all customers in their preferred vernacular language to make the loan application process easier.

    Grow your MSME with collateral-free business loans

    Eligibility Criteria for an Unsecured Business Loan from Kinara Capital

    • The applicant must be at least 21 years old when requesting a loan application and a maximum of 60 years old when the loan matures.
    • The business should be registered as an MSME from the trading, manufacturing, or services sectors.
    • The applicant must be in one of the serviceable pin codes in one of these locations: Karnataka, Gujarat, Maharashtra, Andhra Pradesh, Telangana, Tamil Nadu or UT Puducherry.
    • Total monthly turnover of the business should be greater than Rs. 50,000 and less than Rs. 2 crores.
    • The business should fall within Kinara’s list of sectors and sub-sectors.

    Documents Required for Availing a myKinara Unsecured Business Loan

    Kinara only require applicants to submit basic documents for acquiring Business Loans so that you don’t need to stress about time-consuming documentation or funding delays. Therefore, Kinara's Unsecured Business Loan requires loan applicants to submit only the following documents:

    1. Proof Of Business Registration

    You will need to present documentation proving the company's legitimacy. Water or power bills, Udyam registration, company registration, your company's PAN card, etc., may be used as evidence.

    2. Proof Of Individual Identity

    You need to provide proof of identity. This can be fulfilled by Aadhar card, PAN card (personal), Driver’s License, Passport, etc. While Kinara suggests PAN or Aadhaar, your co-applicant can provide a Voter ID, Driver’s License, or Passport instead.

    3. Financial Documents

    Finance-related documents include bank statements, balance sheets, passbooks, profit and loss accounts, account statements etc. In addition, if you have GST, then you have to submit your GST filings.

    You can acquire a Business Loan online with fast approval in just a few steps by providing these simple documents. In addition, MSME entrepreneurs can complete the entire process digitally.

    Please keep in mind that this list is indicative and that the real list of documents will depend on your profile, the requirements, and the current policy of Kinara Capital at the time of application.

    Steps to Apply for a myKinara Unsecured Business Loan

    To apply for a Business Loan, applicants can check and compare various business loan options that suit their business requirements. Follow the below steps to apply for an Unsecured Business Loan.

    Step 1: Check your business's eligibility on the website's homepage or myKinara App.

    Step 2: You are required to provide personal & business documents. After submitting all the necessary details, the bank’s representative will contact you to proceed with loan formalities.

    Step 3: Once the documents are verified, and the loan application is approved, the loan amount will get disbursed to your bank account within 24-hours.

    Calculate your EMI instantly using Kinara’s EMI Calculator

    Another crucial factor to consider while taking out a Business Loan is the EMI amount. As an MSME entrepreneur, you can only make an informed decision and successfully service a loan if you know how much you will pay each month. Kinara’s Business Loan calculator is a perfect tool to assess your probable EMI based on the loan amount, repayment terms and interest rate.

    Conclusion

    Running a business is challenging when you must constantly monitor your finances to operate efficiently. Not every small business owner has the funds to cover ongoing expenses or to grow and expand the business to the next level. Hence, the Unsecured Business Loan is an ideal option for MSMEs looking for a Business Loan without any property collateral. It helps them meet their varied business-related costs ranging from capital investment to paying wages, expanding the operations, or purchasing machinery.

    So, how about scaling your business to new heights with Business Loans from Kinara Capital? If your answer to the above query is ‘Yes’, then do not wait further. Kinara Capital is one of India's leading and trusted Unsecured Business Loan lenders that provide fast and flexible Business Loans to MSMEs.

    To avail of Unsecured Business Loans from Kinara, MSME Entrepreneurs can check their loan eligibility in 1-minute in the myKinara App, which is available for download from the Google Play Store. Clearing the eligibility criteria, you can upload the minimum required documents on the fully secured portal. Once the documents are verified, the loan amount gets disbursed to the applicant's bank account within 24-hours.

    As India walks on a steady path to post-pandemic recovery and with many government initiatives towards strengthening the MSME sector, it is time for SMEs to propel their business with these versatile, hassle-free loans! For further queries, give a missed call on 080-68264454 and get contacted by Kinara’s customer support team, or you can also reach out to us at our toll-free number, 18001032683, from Monday to Friday, 9.00 am to 6.00 pm.

    FAQs

    1. What is an Unsecured Business Loan?

    An unsecured Business Loan is borrowed capital used to grow a business. It is based purely on the creditworthiness of your business rather than collateral or guarantees. It determines your income, financial papers, and other relevant factors. Unsecured loans benefit a business for various purposes, including business expansion, equipment purchases, inventory management, etc.

    2. Where can I get an Unsecured Business Loan?

    You can check and compare various loan options available at Kinara Capital's official website or myKinara App for getting an Unsecured Business Loan.

    3. Are there any benefits to taking a loan from Kinara?

    Yes, we provide collateral-free business loans within 24 hours. We also offer doorstep customer service and support via phone in local languages. With our myKinara App, we have a three-step quick loan application process:

    • 1-Minute Eligibility Check,
    • Verification Process (KYC & Business Details),
    • Loan Approval & Sanctioning will lead to automatic Disbursement of the loan.

    4. How much money can I borrow from Kinara through an Unsecured Business Loan?

    Unsecured business loans are given based on the applicant’s income. You can borrow Unsecured Loans from Rs. 1 Lakh to 30 Lakh without submitting any property collateral.

    5. Do I need to visit Kinara Branch to take a Business Loan?

    No, you need not visit any branches. For support, you can contact us, and our field officer will visit you at your place of business to provide information and help you with the loan application process.

    6. How can I apply for a Business Loan online at Kinara Capital?

    To apply for a business loan, start by taking the 1-minute eligibility check; click here to get started. If you clear the business loan eligibility, you can take the loan application forward by providing personal and business documents to complete the process. One of our representatives will also reach out to you to help you with the rest of the process.

    7. Who can apply for Unsecured Business Loans from Kinara Capital?

    Registered MSMEs in manufacturing for 1+ years, trading or services sectors for 2+ years can apply for Business Loans at Kinara Capital.

    8. What are the requirements to get a business loan?

    Your business should fit the business loan eligibility criteria and be part of the manufacturing, trading, or services sector, with a monthly turnover between Rs. 50,000 and Rs. 2 crores to get a business loan. Manufacturing businesses should be at least 1 year old, and trading or services businesses should usually be 2 years old.

    Check your eligibility in just 1-minute!

    Apply Now
    Written by
    Team Kinara
    • Tags
    • Unsecured Business Loan
    • Business Loan
    • small business owners
    • collateral-free
    • Kinara Capital

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