Starting a business is a dream for many, but financing that dream can often be a daunting challenge, especially for startups. Traditional loans usually require collateral, which many new entrepreneurs may not have. Thankfully, unsecured business loans—loans that do not require collateral—are available, offering startups and small businesses a chance to access the funds they need without putting their personal or business assets at risk.
Here, we highlight some of the top lenders offering business loans without collateral, tailored for startups and small businesses.
1. Lendingkart
Key Features:
- Loan amount: ₹50,000 to ₹1 crore
- Interest rates: Starting from 12% per annum
- Tenure: 6 to 36 months
Lendingkart is a leading fintech lender specializing in providing quick and easy loans to small businesses. Their completely online application process ensures minimal paperwork and fast approval, making it ideal for startups with limited credit history.
Eligibility:
- Minimum operational history: 6 months
- Minimum turnover: ₹3 lakhs per annum
2. FlexiLoans
Key Features:
- Loan amount: ₹50,000 to ₹1 crore
- Interest rates: Starting from 16% per annum
- Tenure: Up to 36 months
FlexiLoans provides collateral-free loans to startups with a focus on speed and simplicity. They have a quick disbursal process and cater to various industries, including e-commerce, retail, and services.
Eligibility:
- Minimum operational history: 12 months
- Minimum monthly turnover: ₹2 lakhs
3. Bajaj Finserv
Key Features:
- Loan amount: ₹1 lakh to ₹45 lakhs
- Interest rates: Competitive market rates
- Tenure: 12 to 60 months
Bajaj Finserv offers high-value unsecured loans with flexible repayment options. Their loans are ideal for startups looking for long-term funding without the need for collateral.
Eligibility:
- Minimum annual turnover: ₹2 lakhs
- Good credit score (preferably above 750)
4. Indifi
Key Features:
- Loan amount: ₹50,000 to ₹50 lakhs
- Interest rates: Starting from 18% per annum
- Tenure: 3 to 24 months
Indifi partners with banks and NBFCs to provide collateral-free loans customized for different industries, including restaurants, travel agencies, and retailers. Their fast processing time is a significant advantage for startups needing immediate funds.
Eligibility:
- Business vintage: At least 1 year
- Minimum turnover: ₹3 lakhs annually
5. HDFC Bank’s Business Growth Loans
Key Features:
- Loan amount: Up to ₹40 lakhs
- Interest rates: Competitive
- Tenure: 12 to 48 months
HDFC Bank’s Business Growth Loans are perfect for startups needing larger funds without collateral. They offer pre-approved loans for existing customers, ensuring faster processing.
Eligibility:
- Business should be operational for at least 2 years
- Minimum annual turnover: ₹1 crore
6. Khatabook’s Partner Lenders
Key Features:
- Loan amount: Up to ₹20 lakhs
- Interest rates: Varies by partner lender
- Tenure: Flexible repayment terms
Khatabook connects small businesses with trusted lenders offering unsecured loans. The platform’s simplified application process helps startups secure funding without any hassle.
Eligibility:
- Minimum turnover: ₹1 lakh per month
- Business should be GST-registered
Tips for Securing a Business Loan Without Collateral
- Maintain a Good Credit Score: Lenders evaluate your creditworthiness to determine eligibility and interest rates. A score above 700 significantly increases your chances.
- Showcase Stable Cash Flow: Provide clear financial records to demonstrate your business’s ability to repay the loan.
- Have a Solid Business Plan: A well-documented plan showcasing your business model, market potential, and revenue projections can convince lenders of your credibility.
- Leverage Government Schemes: Explore government programs like the Mudra Loan scheme, which offers unsecured loans to small businesses and startups.
Conclusion
Unsecured business loans provide a lifeline for startups and small businesses lacking collateral but needing funding for growth. By choosing the right lender and preparing a robust application, you can secure the financial support necessary to turn your entrepreneurial vision into reality.
When applying for a business loan without collateral, research each lender’s terms carefully to find the best fit for your business needs. With the right financial partner, you’ll be one step closer to achieving your dreams.