Unsecured Business Loan Eligibility and Other Factors to Check when Seeking Financing

The widespread availability and easy access to unsecured business loans have made them a go-to funding option for many small and medium-sized enterprises. These funding options allow a business to secure finance without having to subject a business or persona asset to risk. You only need to meet a handful of unsecured business loan eligibility requirements to avail the advance with ease.

As these are collateral-free advances, the burden of risk is transferred in all totality to the profile of an applicant. Lenders thus make sure that all the eligibility requirements are met by the applicant when assessing their profile. It is thus essential that you observe due diligence in ensuring that you meet the requirements before applying to improve your chances of loan approval. Also, it is essential to consider some other critical factors that should help you make a more informed decision on your business financing. Take a look.

Unsecured Business Loan Eligibility and Document Requirements

When availing an unsecured business loan, you must meet a handful of eligibility criteria laid down by your selected financial institution for hassle-free and fast-tracked loan application processing. Unsecured business loan eligibility requirements may, however, vary from one lender to another. You must thus check with your selected financial institution before proceeding. Following is a list of standard criteria you must meet to avail a business loan without any collateral.

  • The business owner must be a residing Indian citizen
  • Age must be above 18 years 
  • His/her business should have a continued existence of not less than a stipulated number of years, which can vary between 1 year and 3 years from lender to lender
  • The business’s annual turnover should meet the minimum requirement for some lenders

Based on these criteria, one must also provide the necessary documents.

  • Documents required and approved as identity and address proof, like Aadhaar card, voter ID card, driving license, etc.
  • PAN card of individual and business
  • Documents serving as proof of business existence, like registration certificate, partnership agreement, GST certificate, etc.
  • Documents that establish the business’s existence for the stipulated duration
  • Financial statements that project an yearly revenue flow

When certifying to the income, one can also provide income tax returns filed for the required number of years.

Apart from these unsecured business loan eligibility and document requirements, you must also consider other factors to ensure loan suitability.

Other Considerations to Make for Your Unsecured Business Loan

Check out some of the essential things you must keep in mind along with the unsecured business loan eligibility requirement for suitable financing.

  • Rate of interest

Interest rates on unsecured loans may vary from one lender to another. You must thus make a market-wide comparison to ensure that you arrive at the lending institution offering the most competitive rates.

  • Loan amount availability

Check out the maximum loan amount provided by the lender and whether it meets your financing need or not. Accordingly, create a financial plan before applying to ensure lender places confidence in your loan application for easy approval.

  • Terms of lending

Also, make sure that you go through the terms and conditions before signing your loan agreement so you are aware of all lender-based inclusions and requirements.

Once you have considered all these factors, you can proceed to avail funding for your venture with your selected lender. 


Hero FinCorp is a diversified financial services provider in India. We are an associate company of Hero MotoCorp Ltd. Hero FinCorp Limited (HFCL) was incorporated in December 1991 as Hero Honda FinLease Limited. After the restructuring of our parent company Hero MotoCorp Limited (formerly Hero Honda Motors Limited), HFCL also changed its name to Hero FinCorp Limited in July, 2011.

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