Small businesses often face urgent funding needs but may not have assets to pledge as security. A collateral-free business loan provides instant access to working capital, expansion funds, or equipment purchases, without risking property or guarantees.
To support MSMEs and SMEs, lenders and government schemes now offer unsecured loans with faster approvals, flexible repayment terms, and minimal documentation requirements. This makes collateral-free loans an ideal solution for entrepreneurs looking to grow their business with ease.
What is a Collateral-Free Business Loan?
A collateral-free business loan is a funding option where no assets are pledged as security. Small businesses, MSMEs, and startups can access quick finance to manage working capital, expand operations, buy equipment, or cover short-term expenses without risking property or assets.
Collateral-Free Business Loan Interest Rates
| Types of Fees | Applicable Charges |
| Interest Rate | Starting from 1% per month |
| Loan Amount | ₹50,000 to ₹1 Crore |
| Loan Tenure | Up to 36 months |
| Collateral | Not Required |
| Processing Fee | 2% of the loan amount |
Features of Business Loan Without Collateral in India
- Quick Processing
Get loan approval and disbursal within 24–72 hours with minimal documentation. No delays due to asset valuation. - Flexible Repayment Options
Choose from customised EMI plans or structured repayments aligned with your cash flow. Early repayment options are available. - Credit Score Boost
Loan repayment history is reported to leading credit bureaus, helping you build or improve your business credit score. - Minimal Documentation
Apply online with basic KYC and bank statements. No collateral papers or heavy financial reports are required for most loans.
Benefits of Collateral-Free Business Loan
- No Security Required
Access up to ₹1 crore in business funding without pledging property or assets. - Affordable Interest Rates
Starting from 1% per month, with additional benefits for businesses maintaining a strong credit rating. - Fast Approval & Disbursal
Funds are credited in as little as 48 hours, ensuring quick access for urgent needs. - Multiple Loan Options
Suitable for working capital, expansion, equipment purchase, or government schemes like MUDRA. - Flexible Tenure
Repay conveniently over 12 to 36 months, with the option to close early as your revenues grow. - No Restriction on Usage
Use funds for inventory, operations, hiring, or infrastructure upgrades, as per your business requirements. - 100% Online Application
Apply anytime through the FlexiLoans website or app. The entire process, from eligibility check to approval, is digital.
How to Apply for a Business Loan Without Collateral?
Online Application:
Log on to the FlexiLoans website and complete the application form by correctly filling in the relevant information. FlexiLoans will use these details to assess your eligibility for the collateral-free business loan
Upload the required documents online:
Upload all necessary documents, such as KYC documents, current account bank statements, and business KYC documents.
Credit Analysis:
We'll assess your business results and operations to calculate the amount of money you'll be eligible to borrow and the interest rates that will apply. Our loan officers will assist you in understanding the bid and making the right decision.
Loan Disbursement:
FlexiLoans will share the loan agreement after verifying the documentation and approving the loan. The disbursement of funds to the applicant's account is within 48 hours of signing the document.
Business Loan Eligibility Criteria without Collateral
You can apply for a collateral-free business loan if:
- Age: Applicant is 21–65 years old.
- Business Type: Sole proprietors, partnership firms, private limited companies, and SMEs engaged in trading, services, or manufacturing.
- Business Vintage: Minimum 2 years of operations.
- Turnover: Monthly sales of at least ₹2 lakhs.
- Registration: Valid GST registration / Shop Establishment Certificate.
- Banking: At least 6 months’ current account statements.
- Credit History: Healthy repayment record (CMR 1–3 preferred).
- Compliance: No loan defaults, tax-compliant, and properly audited accounts.
Documents Required for Collateral-Free Business Loan
- Personal KYC: PAN card
- Residential Address Proof (Anyone): Rent agreement, driver's license, voter's ID, ration card, Aadhaar Card, passport
- Banking: Last six months' current account bank statement
- Business KYC (anyone): GST registration certificate, shops, and establishment certificate
- Financial documents (for loans greater than Rs. 20 lakh): last two years' audited financials Six-month ITR and GST returns
Access collateral-free business loans with instant approval, minimal documentation, and funds in your account within 48 hours.
- 100% Online Application
- Flexible Repayment Options
- No Collateral Required
Frequently asked questions
- Expanding your business
- Servicing regular working capital needs
- Managing seasonal working capital requirements
- Manage short term cash flow gaps
- Business Loan interest rate is calculated basis- E = P * r * (1+r)^n / ((1+r)^n-1).
- Here, P signifies principal loan amount, r signifies the interest rate, n stands for tenor in months and E signifies the EMI amount.
- You can use the FlexiLoans EMI Calculator to check the interest payable, EMI amount and more.
Why should I avail loan via FlexiLoans?
Quick credit assessment ensures fast disbursal of loan at best rates and flexible terms, thus providing financial access at a click! Our business is to help you grow your business.
Are there any charges other than interest rate that I have to pay to avail a collateral free loan?
We may charge processing fee to facilitate the loan towards legal and documentation charges.
What is the interest rate for the collateral free business loan?
Interest rates start at as low as 1% per month. However, it may depend on various factors like your loan amount, tenure, eligibility, etc.
Who is eligible to apply for a collateral-free business loan?
- Age limit: A major condition for loan eligibility is that the applicant must be between the ages of 21 and 65. Many individuals who fall into or are excluded from this group are ineligible to qualify for a loan.
- Tax records: Having well-managed tax paperwork expedites and streamlines the loan approval process; candidates are required to provide at least one year's worth of tax returns.
- Profitability of the Business: Candidates must show a business strategy that projects an annual profit of at least 10 lakhs.
Can I get a business loan without collateral?
Yes, FlexiLoans provide a collateral free business loan.
How is the interest rate calculated on a collateral free business loan?
- Business Loan interest rate is calculated basis- E = P * r * (1+r)^n / ((1+r)^n-1).
- Here, P signifies principal loan amount, r signifies the interest rate, n stands for tenor in months and E signifies the EMI amount.
- You can use the FlexiLoans EMI Calculator to check the interest payable, EMI amount, and more.
Documents required while applying for instant collateral free business loan?
KYC document
- - Pan card
Proof of residential address (any one)
- - Rent Agreement
- - Driving License
- - Voter's ID
- - Ration Card
- - Passport
Banking
- - Last 6 months of bank statement of current account
Business KYC (any one)
- - GST Registration Certificate
- - Shop Establishment Certificate
Financial documents (For loans greater than 20 Lakhs)
- - 2 years Audited financials
- - Last 2yrs ITR
- - GST Returns of 6 months