Working Capital Loan
A working capital loan is a loan used to fund a company’s day-to-day operations. These loans are not used to purchase long-term assets or investments, but rather to provide working capital for a company’s short-term operational needs.
Payroll, rent, and debt payments are examples of such necessities. Working capital loans are thus simply corporate debt borrowings utilised by a firm to finance its daily operations.
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Working Capital Loan
A Working Capital Loan is used to fund a company’s day-to-day operations, such as paying employees’ wages and settling accounts receivable. Not all firms have consistent sales or revenue throughout the year, and the need for money to keep operations running may arise at times. This is typically the case for businesses with seasonal business cycles or cyclical sales, while some may require such a loan during holiday seasons or periods of low commercial activity. Such loans can be secured or unsecured, which means you may or may not be needed to pledge security to obtain the loan, depending on the loan size and the financial condition of the business.
- Pan Card
- Copy of Sales Tax
- Copy of VAT filing
- open
- Passport
- Ration Card
- Utility Bill – No more than 3 months old telephone or electric bill
- Two years’ worth of bank statements or passbooks
- Income Tax Returns for the previous two years, as well as the computation of the Balance Sheet, Income, and Profit & Loss A/c.
- Proof of continuation of business
- Business Ownership Proof
- Documentation of Collateral
- Upload Documents
- Submit Application
- Get Approved
Working capital = Current assets - current liabilities
Current assets owned by the business include inventory, cash in hand, advance payments, etc.
Current liabilities may include short-term debts, unpaid expenditures, outstanding payments to creditors, etc.
- Indian nationality
- At least three years in business
Age range: 24 to 70 years* - Self-employed
- CIBIL score of 685 or higher
The Benefits of a Working Capital Loan
There are several advantages to obtaining a working capital loan over a traditional business loan:
- No collateral required
- Quick acquisition
- No spending restrictions