Working Capital Loan Offers Start From 10.50%,
Working Capital Loan
Working Capital loan may use for the following purposes:
- Purchasing raw materials
- Making advance payments to suppliers
- Buying inventory
- Funding accounts receivables if payments from debtor’s delay Meet overheads such as wages, rent, and utility bills
Who may need a working capital loan?Small and medium-sized businesses (SMEs) often have limitations on the budget, and a working capital loan is useful for meeting those needs.
Many companies have a seasonal or cyclical market and can choose to use working capital loans to cover their daily operating expenses without revenue consistency throughout the year.
During the off-season, cyclical companies manufacture their goods. During the peak season, the bulk of their revenues come from sales. Therefore, cyclical markets require funds during the remaining year to ensure the smooth operations of their businesses
Eligibility and Documents Required for Business working capital loan :
- Age:21-75 Years
Proof of both Identity and Residence (KYC):
- PAN card
- Voter ID
- Aadhaar Card
- Driver's License
Proof of income:
- Last Three Assessment Years Income Tax Returns with computation of income
- Minimum one year's Balance Sheet and Profit and Loss Account Statements, with Annexures / Schedules
- Last six months Current Account Statements of the business entity and Savings Account Statements of the individual
- Business Profile
- List of Directors and Shareholders with their shareholding certified by a CA / CS in case of a company
- MOA (Memorandum of Articles) and AOA (Articles of Association of the Company)
- Partnership deed in case of partnership firm
- If any ongoing loans of the individual and the business entity, including the outstanding amount, installments, security, purpose, balance loan term, etc.
- Passport Size Photographs
Uses of working capital loans
- Manages market volatility Provides
- flexibility to maximize potential business opportunities
- Provides a reserve fund helps to maintain and boost cash flows
- Provides the funds needed to meet multiple orders
Key features and Benefits of Working Capital Loan
Business Loan for Working Capital has several features as follows:
- Higher loans of up to INR 30 lakh are available to ensure that companies do not face any problems in carrying out their operations because of lack of funds
- Fluidity in withdrawal and repayment is a smart and easy way to manage the cash flows of businesses; interest only charged on the amount used, and this helps to reduce the Equated Monthly Installment by up to 50 % Lenders offer competitive and affordable interest rates on business loans meaning that you do not have any difficulty in promptly servicing the EMI
- The eligibility requirements are easy to meet, and the documentation needed during the loan application is also minimal, ensuring a quick, smooth and secure approval and disbursement process
- the lender provides online access to the credit account that allows borrowers to review all information through the site, making it easier to handle loans. Some lenders offer pre-approved deals that ease the process.
- Also, pre-approval further reduces the time borrowers need to take advantage of the loan. Borrowers can use a business loan calculator online to test the eligibility and calculate the estimated EMI on the amount of unsecured business loan
How You will Unbox Your Working Capital Loan:
- Fill up an online application form with the necessary documentation
- Upon submission and once verified our expert visits you for confirmation and sanction the loan/go online.
- Receive the loan in your bank account.
Working Capital Loan types:Secured and unsecured.
Secured loans require an asset as collateral instead of the funds loaned to your business.
Yet unsecured loans depending on your business's financial health to approve the amount of the loan.
- Overdraft Facilities:pre-approved withdrawal limit that a bank or financial institution gives you on your current account. Prerequisites include a long working relationship, a good credit score, and a reasonable loan amount. You pay interest on the amount withdrawn even if the limit that has approved is higher. Interest rates, however, are usually 1 to 2 percent higher than the lending institution's prime rate.
- Equity Funding: Equity funded working capital loan acquired through personal resources or investors, such as investment from friends or family. Start-ups and businesses with a less than desirable credit score take mostly these working capital loans.
- Short-term Loans: These short-term regular working capital loans, given at a fixed interest rate of up to one year with a limited repayment period. These are typically secured loans that may also have other policy conditions, such as revenue/sales targets that you should meet.
- Loan on Accounts Receivables: Loan sanctions against the documented value of the purchase order, this type of debt are perfect for your business if you have a good customer base as there is always a risk of default in the invoice. Instead, financial institutions are also afraid to provide new businesses with those working capital loans
- Advances: Like a loan receivable from the accounts, this loan is against potential credit card receipts rather than confirmed purchases and sales. This type of debt, however, only serves a business that accepts payments by credit card.
- Trade Creditor: An existing or new supplier can avail of a working capital loan. In general, this facility offers on placing bulk orders. Trade creditors, however, typically have strict policy requirements that the borrower must fulfill.