Unsecured Working Capital Loan
Working Capital Loan is a type of funding or credit required by several startups, enterprises or companies to manage their day-to-day business operations and to manage business cash flow. Working capital loans are short-term loans to fulfill instant business requirements and cannot be used to buy long-term assets or for investment purposes.
Key Benefits
- Funded facilities, i.e. the bank provides funding and assistance to actually purchase business assets or to meet business expenses.
- Non-Funded facilities, i.e. the bank can issue letters of credit or can give a guarantee on behalf of the customer to the suppliers, Government Departments for the procurement of goods and services on credit.
- Available in both Indian as well as Foreign currency.
Eligibility Criteria for Working Capital Loan
- Age Criteria: Min. 18 years & Max. 65 years
- Business Vintage, Annual Turnover and work experience to be defined by lender
- Good CIBIL score and repayment history
- No previous loan default with any financial institution
Features of Working Capital Loan
Listed below are the key benefits and features of taking a working capital loan in India:
- Working capital loans interest rates range between 17% and 27%*. The applicable rate depends on several factors such as your net income, collateral, location, business stability, existing monthly obligations, and more
- We offer collateral-free business loans upto INR 30 lakhs*
- Flexible repayment tenure ranging between 12 to 36 months for working capital loan India
- The processing fee is up to 6.5%* of the loan amount
Types of Working Capital Loans
- Bank Overdraft Facility or Credit Line
- Short-Term Loans
- Equity Funding via Personal Resources or Investors
- Accounts Receivable Loans
- Factoring or Advances
- Trade Creditor
Pros of Working Capital Loans
- On-hand cash to deal with cash flow problems
- Always in control of the company
- May not need to place a collateral
- Can borrow and repay promptly
- No restrictions on how you spend the money
Cons of Working Capital Loans
- Have to repay the capital and interest in full
- May need to put up collateral
- High rates of interest
- Defaulting on the loan can affect personal credit score
Main components of a Working Capital Loan
The following are the main components of a working capital loan:
- Accounts receivables
- Inventory
- Account payable