If you’re a startup founder in India, you already know how tough it is to raise money without giving away a piece of your company. Most investors ask for equity in exchange for funding, and that means losing control early. But what if you could get ₹10 to ₹50 lakh in funding without giving up any equity?
The answer lies in unsecured business loans.
These loans don’t need any collateral, and they give you access to fast funding, which is ideal when you need working capital, want to grow your team, or want to handle operational expenses. And the best part? You stay in full control of your startup.
In this guide, we’ll show you 5 smart and proven ways to get an unsecured loan of ₹10–50 lakh in India. Whether you’re an early-stage startup or a growing MSME, these options can help you get the money you need without diluting your ownership.
What Is an Unsecured Business Loan & Why Is It a Gamechanger for Startups?
Unsecured vs. Secured Loans – What’s the Difference?
A secured loan requires you to pledge an asset like property, gold, or equipment as collateral. If you fail to repay, the lender can seize your asset.
An unsecured business loan, on the other hand, does not need any collateral. Approval is usually based on your credit score, business revenue, or cash flow.
| Feature | Secured Loan | Unsecured Loan |
|---|---|---|
| Collateral Required? | Yes | No |
| Processing Time | Slower (7–15 days) | Faster (2–5 days) |
| Ideal For | Asset-backed businesses | Startups, MSMEs |
| Risk to Founder | High | Low |
When Should Startups Consider Unsecured Loans?
- When you need working capital for daily operations
- During capital budgeting for a new product or expansion
- If you’re not yet profitable but have strong future revenue
- When you want quick funding without giving away equity or assets
Why You Should Avoid Diluting Equity Too Early
In the excitement of building a startup, many founders give away large chunks of equity for small amounts of money. But equity is your most valuable asset.
The Real Cost of Giving Equity
Let’s say you give away 10% equity today for ₹30 lakh.
In 5 years, if your company is worth ₹50 crore, that 10% becomes worth ₹5 crore. That’s a big price to pay for a small early-stage loan.
Remember: Investor Money ≠ Free Money
Taking money from VCs or angels often means:
- You lose control over business decisions
- There’s pressure to scale fast, even before you’re ready
- You may be forced to change paths, cut jobs, or shut down unprofitable verticals
Unsecured business loans let you keep your freedom and focus.
5 Smart Ways to Get a ₹10–50 Lakh Unsecured Business Loan (Without Equity Dilution)
1. Apply for an MSME Loan via Government-Backed Schemes
The Indian government supports small businesses and startups through schemes like:
- CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises)
- Stand-Up India
- PMEGP (Prime Minister’s Employment Generation Programme)
Why this works:
- No collateral needed
- Low interest rates (7–12%)
- Backed by credit guarantees
Who is eligible?
- Registered MSMEs
- Businesses with Udyam Registration
- Some schemes require SC/ST/Women ownership or specific sectors
Pro Tip: If you haven’t done it yet, register your business on the Udyam portal. It’s free and takes just a few minutes.
2. Use Fintech Platforms That Offer Fast, Paperless Loans
Fintech lenders are the new-age option for startups. They offer digital-first, fast-disbursing unsecured loans with minimal documentation.
Popular platforms include:
- BigMudra
- Lendingkart
- Indifi
- Razorpay Capital
- FlexiLoans
| Platform | Loan Range | Processing Time | Ideal For |
| BigMudra | ₹1L – 5Cr | 24-48 hours | Every business |
| Lendingkart | ₹50K – ₹50L | 2–3 days | Working capital, inventory |
| Razorpay Capital | ₹5L – ₹50L | <48 hours | SaaS, e-commerce, D2C |
| Indifi | ₹1L – ₹50L | 2–5 days | Restaurants, retail |
Why this works:
- Quick online application
- Minimal paperwork
- Doesn’t depend only on credit score; revenue and invoices matter too
3. Approach NBFCs with Startup-Friendly Loan Products
Non-Banking Financial Companies (NBFCs) like Tata Capital, Hero FinCorp, and Bajaj Finserv offer unsecured loans specifically for businesses.
Advantages:
- Less strict than banks
- Accept newer businesses (even <2 years)
- Can assess cash flow, GST filings, or invoice history
What you will need:
- PAN & Aadhaar
- 6–12 months of bank statements
- Business proof (GST, incorporation, Udyam)
- Sometimes, a co-applicant or guarantor
4. Use Invoice Financing or Merchant Cash Advance (MCA)
Have unpaid invoices or regular POS sales? Then invoice financing or an MCA can give you upfront cash.
How Invoice Financing Works:
- You raise an invoice to your client
- A lender gives you 80–90% of invoice value immediately
- You repay once the client pays
How MCA Works:
- You get a loan based on future credit/debit card sales
- Repayment is deducted daily as a % of sales
Ideal for:
- E-commerce sellers
- Service businesses with predictable revenue
- Retail stores with card machines
Mini Case Study:
A Bengaluru-based SaaS startup used invoice financing to raise ₹25 lakh in 48 hours for a new product launch.
5. Tap into Peer-to-Peer (P2P) Lending Platforms
P2P platforms connect you directly to individual investors, without banks or NBFCs.
Top platforms:
- Faircent
- LenDenClub
- LiquiLoans
How it works:
- You list your loan requirement
- Multiple investors pool small amounts to fund it
- Once funded, you repay monthly EMIs with interest
Pros:
- Great for early-stage startups without a long credit history
- Fast approval and flexible terms
Cons:
- Interest can be higher (18–24%)
- Less regulation than banks
Always compare total cost (APR) before you decide.
What’s a Good Business Loan Interest Rate in 2025?
Interest rates vary depending on the lender type:
| Lender Type | Typical Interest Range |
|---|---|
| Banks (MSME Loan) | 7% – 12% |
| NBFCs | 10% – 20% |
| Fintech Platforms | 10% – 24% |
| P2P Lending | 18% – 24% |
Factors that impact interest rates:
- CIBIL score or credit rating
- Monthly turnover and revenue
- Years in operation
- Business model and sector
Business Loan Eligibility Checklist (2025)
To improve your chances of approval:
| Criteria | Recommended Standard |
|---|---|
| Age of business | 1+ year |
| Minimum turnover | ₹20–30 lakh per year |
| CIBIL score | 700+ |
| Business type | Sole Proprietor, Pvt Ltd, LLP, etc. |
| Documents | PAN, GST, bank statements, ITR, business proof |
How to Plan Capital Budgeting Before You Apply
Before you apply for a business loan, have a clear capital budget:
- Estimate working capital gaps
- Allocate funds: inventory, payroll, marketing, etc.
- Forecast ROI for loan usage
- Keep a repayment plan ready
Lenders prefer borrowers who show capital budgeting maturity.
How to Apply for a Business Loan (Step-by-Step)
- Check eligibility on lender’s site or via fintech app
- Compare offers and interest rates
- Prepare documents (PAN, Aadhaar, ITR, bank statements)
- Apply online (or via loan agents)
- Await sanction and disbursal (within 3–7 days)
Documents You Will Need to Apply
Most lenders (banks, NBFCs, or fintechs) will ask for:
| Document | Purpose |
|---|---|
| PAN Card & Aadhaar | Identity & KYC |
| Business Registration | Proof of legitimacy |
| GST Returns | Tax compliance |
| Bank Statements (6–12 months) | Cash flow verification |
| Financial Statements | To check repayment ability |
| Business Plan (sometimes) | For projections |
Quick Comparison Table – Which Option Is Right for You?
Choosing the right financing option depends on your business needs, repayment capacity, and growth stage. The table below offers a side-by-side comparison of the top unsecured business loan options, helping you quickly evaluate which one aligns best with your startup or MSME goals.
| Option | Speed | Interest Rate | Best For | Collateral Needed |
|---|---|---|---|---|
| MSME Loan | Moderate | 7–12% | Registered MSMEs | ❌ |
| Fintech Platforms | Fast | 10–20% | Young startups | ❌ |
| NBFCs | Fast | 10–22% | Cash flow positive businesses | ❌ |
| Invoice Financing | Very Fast | 15–24% | B2B businesses | ❌ |
| P2P Lending | Fast | 18–24% | Founders with low credit score | ❌ |
Frequently Asked Questions (FAQs)
Q1: Can I get a ₹10–50 lakh loan without any collateral in India?
Yes. You can apply via fintech platforms, NBFCs, P2P lenders, or government MSME schemes like CGTMSE.
Q2: Is a CIBIL score compulsory for unsecured loans?
It helps, but some fintechs and NBFCs focus more on business cash flow, invoices, or UPI transaction data.
Q3: How quickly can I get the loan?
Fintechs may disburse in 2–3 days. Government schemes take longer (1–2 weeks). Invoice financing can happen in 24–48 hours.
Q4: Are business loan interest rates fixed or floating?
Most are fixed for unsecured loans. Always ask for a written agreement before signing.
Q5: What happens if I miss an EMI?
You may be charged a penalty. It can affect your credit score and future loan eligibility.
Final Thoughts: Choose Debt Smartly, Save Your Equity
If your startup needs funds, don’t rush to give away equity. Loans may feel like a burden, but they let you stay in control. With many new-age options like fintechs, P2P platforms, and government schemes, getting ₹10–50 lakh in unsecured funding is easier than ever in India.
Just remember:
- Don’t borrow more than you need
- Repay on time to build a solid credit profile
- Compare all options before choosing one
Need help picking the best loan option for your startup? Drop us a message by clicking here; we would be happy to guide you.
Explore related blogs.
MSME Loan Scheme 2025: Best option for Startups, Small Businesses & New Entrepreneurs
Business Loan Interest Rates in India 2025 – Updated Comparison Guide
Seasonal Cash Flow Problems? Short-Term Business Loan Solutions for SMEs
