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