Even for SMEs with great experience in the industry, securing a working capital loan is a harder task than one thinks. Availing a working capital loan is easier said than done. It is because most of the traditional financial institutions are not willing to take a single risk on a business whose plan does not excite them. Basically, they would not provide the helping hand if they do not find value in the proposition. However, the Working Capital Loan we are talking about here is the one that is provided by the banks. Banks are conservative when making such an investment, but you have alternatives in your hand. We will talk about it at the end of this blog, firstly let us understand Working Capital Loans:
The meaning of the loan type lies in its name. Working Capital Loans are specifically designed loans which help a business to cover miscellaneous operational expenses which include everything from payroll to marketing, from inventory to rent. The basic functioning of this loan type is that it works towards nurturing a business. The whole purpose of this loan is to help your company work fine and grow.
How beneficial is a Working Capital Loan?
The benefits of a working capital loan depend upon the business plan. Based upon the plan, one can decide how helpful can a working capital loan be. In general, the working capital loan is of great help as daily expense bearing becomes easy. Many times, clients and customers tend to pay late, due to a delay in their invoices, there occurs a financial crunch. In such a scenario, a working capital loan is a rescuer as it helps to pump in cash during urgent needs. Now, this a basic example wherein a working capital comes in handy.
However, things get trickier when it comes to purchasing. The best part here is that you do not have to disclose your plans to the lenders. Most of the lenders often assume that if you are borrowing a working capital loan, it is being done so for miscellaneous use. Having talked about that, let us highlight some of the benefits of a working capital loan:
Cash Injection: The biggest benefit of working capital loan is that it provides cash injection at the time of urgent need. A missed payment or a hefty delayed cheque would not land your business in a financial crunch when you have a working capital loan on your side.
Miscellaneous expense: A working capital loan helps to cover miscellaneous charges as mentioned above. Right from paying rent to marketing expenses, everything can be taken care of with the help of a working capital loan.
Interest rate: The working capital loan interest rate is one of the most beneficial factors. The nominal interest rate makes the repayment process much easier.
Higher loan amount: If you avail working capital loan from an NBFC such as Bajaj Finserv, you can avail a loan amount of up to Rs. 30 lakh.
Line of Credit: Line of Credit is an additional feature you receive which helps you to manage your cash flow in a smart and better way.
The options above are few of the benefits of working capital loans. If you are looking to take a working capital loan, look no further, as they are one of the most flexible financial institutions and the product they offer makes the process of repayment quite easier. Thus, not only have they made taking a working capital loan easier but the process of repaying it as well.