SME finance solves this problem . Unsecured business loans are granted on the basis or creditworthiness and profitability of the business .
● Unsecured loans serve multiple requirements It can be availed for multiple reasons :
➢ Pay wages to employees
➢ Upgrade your business technology
➢ Purchase stock or inventory
➢ Diversify product range
➢ Make vendor payments
➢ Cover other short-term business costs Unsecured business loans can be put to multiple uses . Lenders of unsecured loans do not limit the use of the loan . As long as the loan is used for business purposes , there are no restrictions .
MSMEs are small-scale developing enterprises which find secured loans difficult to avail . Unsecured business loans provide an easy source of finance without requiring any collateral or security . That is why an unsecured loan is preferable over a secured one .
Ref URL : https :// in . investing . com / analysis / why-msmes-prefer-unsecured-business-loans-200171281