Are you an aspiring entrepreneur or an established business owner?
It doesn’t matter.
Sure! Business Finance can be highly beneficial for you. It can get you started, can pull you out of arduous situations and help your business expand and progress.
When looking for finance options for a small business, it’s necessary to understand all there is to secured and unsecured loans and how they are different. The choice of loan will affect the rate of interest, terms of repayment, and any claims that a lender (bank, NBFC, private financier, money lenders, etc.) might have on your business or personal assets.
Every business needs access to responsible financing. JP Finance, one of the most trusted private finance companies for businesses, is here to break down the differences between secured and unsecured business loans and what that means to your business.
JP Finance believes in providing dynamic solutions to your business finance needs by making business loans more accessible with the effective use of technology and a simplified application process. The curated private finance options from JP Finance provide almost instant funds to help your business needs. JP Finance believes in empowering businesses. With our unsecured loans, we can help you succeed in no time at all. Listed below are the advantages of an unsecured loan with JP Finance.
| Secured Loans | Unsecured loans | |
| Interest Rates | Lower | Comparatively Higher than secured loans but competitive in the market |
| Eligibility Criteria | Stringent | lenient |
| Collateral | Yes | No |
| Risk to the Borrower | High due to collateral pledged | Lesser risk due to no collateral |
| Borrowing Limits | Higher | Lesser |
| Documentation | Intensive Documentation | Minimal Documentation |
| Processing speed | Slow | Almost instant |
| Hassle-free working capital | Needs collateral for availing working capitals. Difficult for small and relatively new businesses | Immediate disbursal and easier for small and relatively new businesses to avail the much-needed working capital |
| Repayment Tenures | Long term | Short term |
| Foreclosure | Involves its own penalties and charges | No foreclosure charges |
| Usage Flexibility | Fixed – for specific purpose mentioned at the time of loan application | Flexible – the sanctioned loan amount can be used for any purpose that the borrower sees fit |
| Sharing of Ownership | Yes- in case of venture capitalists or angel investors | No sharing of ownership |
| Credit Building | Builds credit slowly owing to the longer repayment tenures and foreclosures subject to additional charges and penalties | Rapidly builds credit due to short repayment tenures and flexible repayment charges with no additional charges |
