How Muthoot Finance provides secured business loans?
Muthoot Finance offers a Secured business loan, also known as the collateral loan, which requires a firm asset, such as land, property, or equipment, to be pledged as the collateral if the borrower defaults. With a secured loan, you can get a longer-term and cheaper interest rate. The company provides secured loans to firms with a limited track record and a small asset base that cannot obtain financing from commercial banks.
The borrowers will expand their businesses and construct an unencumbered portfolio that can be assigned later. Suppose your company is not suitable for the unsecured loans but has assets such as property, land, machinery, equipment, or other commercial property. In that case, you can bring these assets as collateral to get a secured business loan in a country such as India.
Secured Business Loan
When negotiating the terms of secured loans with banks or NBFCs, the word “collateral” is highly likely to come up. Collateral is an item, property, or another item that you pledge as “security” for loan repayment. The bank will remove your collateral if you are unable to repay the loan. Because of this, secured loans are thought to be riskier. For example, business-related equipment or devices are used as collateral in secured business loans.
If you don’t make your payments and can’t repay the loan, the lender will seize your collateral. They may then resell the collateral to make up the difference between what they owe and what they are owed. As a result, collateral will always be required when obtaining secured company loans. Keep in mind that you have a long time to return the loan; nevertheless, if you continue to miss payments, the lender may take legal action against you. The first move in this situation will be to seize your collateral.
How does it provide?
The company provides secured loans to firms with a limited track record and a small asset base that cannot obtain financing from commercial banks. The borrowers will expand their businesses and construct an unencumbered portfolio that can be assigned later.
Millions of Indians have transformed their lives by the Muthoot Group, which has given wings to their ambitions and turned them into reality. The Muthoot Group has not only grown enormously but has also facilitated growth for a significant portion of the country’s underprivileged population, having serviced over 70 crore clients to date (including recurring customers) and serving around 2.5 lakh consumers every day.
Documents Required
- Proof of Identity
- Proof of Address
- Proof of office ownership with the applicant’s name.
- Evidence of business continuation.
- Profit and Loss Sheet
- Balance Sheet
- Photograph (Passport Size)
Eligibility Criteria
- The applicant must not work in the banking industry.
- When applying for a loan, you must be over the age of 21.
- Any of the working sectors, such as manufacturing, service, or trading, can be represented by the applicant.
- The applicant must fall into one of the following groups:
- Firms that form partnerships.
- It’s a one-person business.
- Individuals and professionals who work for themselves.
- Limited liability companies (LLCs).
- Limited companies with a small number of shareholders.
- Grocery stores, vegetable vendors, and other micro-businesses are examples.
- Electronic stores, tailors, and other SMEs are examples of SMEs.
Advantages and benefits
- The interest rates on the business loans are competitive.
- For the poor, insurance policies are also available.
- Workers in the unorganized sector can participate in pension plans.
- Depending on the current cycle and the scheme, the repayment time can range from 12 to 30 months.
- Loans are disbursed within a few days, as the applicant may have a pressing need for funds.
- A minimum of one month of the moratorium is required for smaller businesses. There is no embargo period for small and medium enterprises.
- There are prepayment options available. For additional information on prepayment options, don’t hesitate to get in touch with customer service.
- For commercial loans, Muthoot Finance does not levy any foreclosure fees.
- You can apply for a loan online or in-person at a branch near you.
- Documentation is hassle-free and does not require the applicant to go from one location to another to obtain the necessary paperwork.
- Because their method is transparent, there are no hidden or regulatory fees.
