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Mumbai, Delhi, Kolkata, Chennai, Hyderabad or Bangalore; These major metro cities are the business hubs in India. They are incubators for thousands of small businesses and startups in the country.

Business loans without any security are called Unsecured Business Loansand are available in all these major metros. However, the process may be a little more stringent compared to secured business loans.

You have to pay attention to the following points if you want to get a small business loan without any security:

  • Age of the business: It matters how long your business has been running. Most lenders look into a business that is at least 3 years old.
  • Profitability and sustenance: Lenders are willing to lend to a business that has been showing profits for at least the past 2 years. They also want you to present documents to prove the sustainability of the business in the near future.
  • Annual Turnover: This is largely dependent on the lender. It could vary from Rs.5 lakhs per annum up to Rs.25 lakhs per annum depending on the business segment.
  • Location of your business: Even though it is a metro city, a few locations are out of bounds. For eg; the Dharavi slum in Mumbai or any other slum in Delhi pose a security risk to recovery agents. So businesses from these locations are not generally sanctioned loans.
  • Credit Score: Lenders expect a credit score of 700 and above. This is a healthy score and indicates your credibility.
  • Income Tax Returns: You need to submit your ITR forms for the past 2 years along with your loan application. This is a much-required document for your loan processing.

Conclusion

Business loans are mostly secured loans. Unsecured business loans come with high-interest rates. Metro cities are bustling hubs of businesses and lenders will capitalize on this by lending to eligible applicants.

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