How to get Unsecured Working Capital Loan for Your Business

Running a business brings you surprises. Sometimes, you need a boost to buy inventory, pay salaries, expand operations, or capitalise on a new opportunity. That’s when an unsecured working capital loan can be your go-to choice. No collateral. No long waits. Just quick funds to keep your business moving.

Let’s learn the details so that you engage in smarter decision-making.

What Is an Unsecured Working Capital Loan?

It is a loan you can get for your business without pledging any collateral. It’s designed to help you cover day-to-day expenses. They can be but not limited to:

• paying vendors
• restocking inventory
• handling payroll
• expanding your business

Unlike secured loans, you don’t risk your assets if you can’t repay. Instead, lenders look at your business’s creditworthiness, cash flow, and financial health.

In short:

• No collateral required
• Quick approval and disbursal
• Flexible usage for business needs

Benefits of Unsecured Working Capital Loans

Why do so many businesses prefer working capital loan unsecured options? Here are the top reasons:

• No Collateral Needed: Perfect for small businesses or startups that don’t have big assets to pledge.
• Fast Processing: Many lenders approve and disburse funds within 24 hours to a few days.
• Flexible Repayment: Choose repayment terms that fit your cash flow—monthly or quarterly installments.
• Covers Everyday Expenses: Use the funds for salaries, rent, inventory, or even to grab a new business opportunity.
• Low Documentation: Minimal paperwork compared to traditional loans.
• Accessible for MSMEs: Even if your credit score isn’t perfect, you may still qualify.
• Helps Manage Cash Flow: Smooth out seasonal dips or delays in customer payments.

Who Can Avail an Unsecured Working Capital Loan?

Eligibility for business working capital loans varies by the lender, but here are common requirements:

• Business Type: MSMEs, sole proprietors, partnerships, private limited companies, and LLPs in manufacturing, trading, or services.
• Business Vintage: Usually, your business should be running for at least 2–3 years.
• Turnover: Minimum monthly turnover often starts at ₹50,000; some lenders require up to ₹2 crores annually.
• Age: Owners should be between 21 and 65 years old.
• Credit Score: Preferred CIBIL score is 650–700+, but some lenders are flexible.
• Financials: Last 12–24 months’ bank statements and financial documents.

Bottom line: If your business is stable and has regular income, you’re likely eligible.

Documents Needed to Apply for a Working Capital Loan Unsecured

Applying for a business working capital loan is simple. Here’s what most lenders ask for:

• KYC documents: PAN card, Aadhaar card, etc.
• Business registration: Udyam, GST, or other business proof.
• Bank statements: Last 12 months.
• Financials: ITRs, audited financials for the past 1–2 years (optional with some lenders).
• Ownership proof: For companies and partnerships.
• Passport-size photograph

My Mudra accepts digital copies, so you can apply entirely online, anytime, anywhere.

How to Apply for an Unsecured Working Capital Loan

Getting a working capital loan unsecured is easier than ever with My Mudra. Here’s a step-by-step guide:

• Check Eligibility: Use our online eligibility checklist or speak with our loan experts.
• Choose Loan Amount and Tenure: Decide how much you need and for how long. Amounts typically range from ₹1 lakh to ₹50 lakhs, with tenures from 12 to 60 months.
• Complete Application: Fill out our online form with your business and personal details.
• Upload Documents: Submit digital copies of KYC, business proof, and bank statements.
• Get Approval: Get your business working capital loans approved in minutes once our executives vet your application and verify your details.
• Disbursal: Once approved, funds are credited directly to your business account within 24–72 hours.
• Repayment: Pay back in easy EMIs or flexible instalments, as per your agreement.

Features to Look For in a Working Capital Loan

When choosing an unsecured working capital loan, consider:

• Loan Amount: Ranges from ₹50,000 to ₹50 lakhs, depending on the lender and business profile.
• Tenure: 12–60 months
• Interest Rate: Starts at 15–28% per annum for a working capital loan. Get the best ones with My Mudra.
• Processing Fee: Usually 1–2% of the loan amount.
• Prepayment: Some lenders allow part-prepayment or foreclosure without extra charges.
• Flexible Use: Funds can be used for any business-related expense.

Why Choose an Unsecured Working Capital Loan Over Other Options?

• No Asset Risk: You don’t risk losing property or equipment if you can’t repay.
• Faster Access: No collateral means less paperwork and quicker processing.
• Ideal for MSMEs: Many small businesses lack high-value assets. Unsecured loans are designed for them.
• Flexible Usage: Unlike some loans, there are no restrictions on how you use the money.
• Builds Credit: Timely repayment can improve your business credit profile.

How can an Unsecured Working Capital Loan be Used?

• A service business faces a sudden spike in orders. Instead of missing out, they get an unsecured working capital loan, hire extra staff, and fulfil all orders on time.
• A local retailer needs to restock before a festival. Instead of waiting for customer payments, they get an unsecured working capital loan. Inventory is stocked, sales go up, and the retailer repays the loan from festival profits.

Common Uses of Unsecured Working Capital Loans

• Purchasing inventory or raw materials
• Paying salaries and rent
• Covering utility bills and daily expenses
• Managing seasonal demand spikes
• Funding marketing campaigns or new product launches
• Renovating business premises
• Expanding into new markets

Fund Your Business Today!

An unsecured working capital loan is a lifeline for businesses that need quick, flexible funding without risking assets. At My Mudra, we help you get unsecured working capital loans quickly and easily. Our experts guide you through every step, from eligibility checks to disbursal, so you can focus on growing your business, not paperwork.

Ready to boost your business with fast, collateral-free funds? Apply today with My Mudra and keep your business moving forward.

Also Read:
- Get Working Capital Loans for Small Business
- Difference between Term Loan and Working Capital