Working capital financing is often required in order to achieve your business targets and keep the business on track. With the growth of your business, its funding needs undergo a sea-change. Also, there could be sudden changes in revenues earned; which may dwindle during lean business seasons, or peak at other periods of prolific business.
These changes may threaten the stability of regular business operations, which can be averted using working capital financing. There are various types of working capital loans or financing; which mode suits your business best is subject to your specific needs.
Types of working capital funding
In India, you will find several ways to finance your working capital. Examples are trade credit, discount of bills, bank guarantee, bank overdraft, letter of credit, invoice factoring and working capital loan.
While most of the above options may suit your requirements, a working capital loan is the most popular mode of business financing for a variety of reasons. Read on to find out why a working capital loan may be just the business financing you need.
Commonly asked questions around Working Capital Loans
What is a working capital loan?
A working capital loan is generally availed when a business needs funding for short-term operational requirements. The loan covers a business’ day-to-day activities such as inventory purchases, payroll, promotions, and marketing. The funding is meant to help a business achieve its targets, grow, and generate revenue.
An unsecured loan meant to fund SMEs, a Bajaj Finserv Working Capital Loan offers up to Rs.30 lakh comes with an interest rate of 18% onwards, and a tenor ranging between 1 to 5 years. Armed with a working capital loan, you can definitively put an end to all your business funding worries, hassle-free.
Advantages of a working capital loan
Here are six benefits of a Bajaj Finserv working capital loan to give you a better understanding of why it may be the best mode of financing for your business:
- It fuels short to medium-term business needs with an injection of financing of up to Rs. 30 lakh
- It is a collateral-free loan, meaning that you can avail the loan without providing any security, and continue running your business smoothly without roadblocks
- Approval for the loan is quick and easy. This ensures that you can obtain your funding without delay in case of urgencies.
- It helps maintain cash-flow, enabling your business to gain strength and remain stable during urgent or unexpected financial needs
- A Flexi Loan Facility allows you to withdraw the amount you need via the credit line when you want
- Ownership of business is preserved with working capital loans. You can maintain complete control over business strategies and decisions, unlike certain other sources of funding such as venture capital.