Lowest Interest Rates – Calculate EMI – Check Eligibility – Fast Approval
from Bank/NBFC – Special Offers
Lowest Interest Rates – Calculate EMI – Check Eligibility – Fast Approval
from Bank/NBFC – Special Offers
Working capital loans are loans taken by business organizations for financing their routine, day-to-day operations. These loans are usually taken to cover costs such as employees’ wages or cover accounts payable. Working capital loans are usually taken by organizations which have extremes in their sales cycles and require funds during times of reduced business activity. Working capital loans may be secured or unsecured.
Working capital loans are not meant for long term investments or assets purchases. These are usually used for purposes such as clearing up wages, account payable etc. As such, these loans are meant to allow businesses to continue operations daily even when they don’t have the required operating expenses. The loans are a way to ‘buy time’ so as to look for avenues for revenue generation while continuing general operations.
There are multiple modes of disbursal of working capital limits such as letter of credit, letter of guarantee, bills limit, and cash credit, among others. In general, banks will not ask for collateral security or third party guarantees in case the borrowed amount is less than Rs.1cr though individual banks have different criteria for releasing these loans. You are advised to check individual products from banks to ascertain the eligibility criteria.
To put it simply, a working capital loan is taken to finance a company’s operational expenses. When there’s a shortage of cash flow to manage short-term needs, a company may resort to this type of loan. The finance received from this loan can be used for various purposes:
A working capital loan can give you the extra cash you need to get through the hard times. Having a chunk of cash available when you need it can give you a head-start and help ensure continued business success.
A savvy business person knows how important it is to be prepared to take advantage of once-in-a-lifetime opportunities. If you don’t have the cash available when an opportunity arises, you could miss out.
When you first start your business, it may be okay for you to wear many different hats. However, at some point, the advantages of hiring a new employee far outweigh the extra cost.
An equipment or technology upgrade can significantly impact business operations. Putting off needed repairs can result in a catastrophic failure.
If you need to manage your company’s immediate expenses, a working capital loan has several benefits that will work in your favour.
| Unsecured loans | When you apply for a working capital loan, you’re not required to pledge any type of asset as security. You can also get a sizeable loan amount sanctioned, going up to Rs.30 lakh. Now, the amount granted varies from bank to bank, and also depends on other eligibility criteria. |
| Quick application and approval process | One of the major benefits of a working capital loan is the convenient application and approval process. All you have to do is share basic information and submit minimal documentation to begin your application process. The lack of collateral also speeds up the approval process. Once your loan is approved, you can expect the sanctioned amount to be disbursed quickly. |
| No interference | Considering that this is a short-term loan, you’re not required to give your lender any information about your expenditures. The lender also has no involvement in your business matters, since there is no ownership from their end or any exchange of shares. All you have to concern yourself with is the equated monthly instalments and clearing those balances before the due date. |
| Flexible withdrawals | Some businesses don’t have a structured budget or plan for their finances, especially when it comes to procuring new material or managing overhead costs. This is when a working capital loan comes in handy because you have the flexibility to spend as per your discretion. You’re not required to share a detailed plan of your company’s expenditures to acquire the loan. In fact, some banks also offer flexi working capital loans. Here, you only borrow how much you require and pay interest on the borrowed amount. You can also repay your dues when you have the finances, without worrying about the pre-payment charges. |
| Pre-approved loan offers | Some banks also give you the option of accessing pre-approved loans. Now, these offers make the application and approval process far easier. To get a hold of this offer, you may be asked to submit your basic information on the bank’s portal. If you’re eligible for the loan, the approval and disbursal should have a quick turnaround. |
The criteria vary from lender to lender. However, listed below are some basic requirements to be eligible for a working capital loan.
You may be asked to provide additional information to verify your business as well.
As mentioned above, the document requirements for a working capital loan are minimum. Check the list below to get an idea of what documents you need to keep handy.
There are several public and private banks in India that offer working capital loans to its customers. Here are some of the major banks and NBFCs that provide this loan:
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Get Started NowApplying for a working capital loan is simple and typically only takes a few minutes. You can apply over the phone by calling 7976769402 or by sending in the completed application by fax or email.
To qualify for a loan, your business should be US based, have 6 months’ time in business and $90,000+ in annual revenue.
Decisions are based on the analysis of your bank statements, company profile and personal credit history. We will make sure to give you multiple options and advice for what suits your business best.
The factors determining the working capital requirement include –sales, the time-span of the operating cycle, nature of business and contingencies, among others.
We issue approvals within minutes of your submission. We fund most new clients in the same business day.
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