A working capital loan is a debt which will help the business to meet its short term needs and to carry its everyday operations with ease. The working capital loan will provide short term liquidity and adequate cash inflow to the business. It will help the business to come out from the cash crunch kind of circumstances.
Quick Approval and Disbursal – Another significant characteristic of this loan is that it is easy to obtain as minimum documentation is required to process the application.
Collateral Free – The Working capital loan is an unsecured loan. There is no requirement to put any collateral to secure the loan. A business can avail unsecured working capital loan up-to 30 lacs.
Equity Sharing is not Required – Sharing the equity of the company is not required in the working capital loan. All the equity of the company and control will remain with the business.
Working capital loans are taken by a business to perform its day-to-day operations. Working capital loans helps the business to generate immediate cash for their everyday overheads.
Many businesses take the Working capital loan to fulfil requirements mentioned below: –
- To pay the salaries of the staff
- To purchase raw material for the business
- To outperform the cash crunch situations
- Provides liquidity and adequate cash inflow
Business owners require capital to perform various day to day operations to run the business with ease. Working capital loans are a good source of capital for the startups and SME’s as they provide liquidity and adequate cash inflows to meet the everyday overheads.