Boost your Business Cash Flow with Loan Bazaar’s Working Capital
Trusted by all the Business Verticals at various locations in India
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4.8
860 Justdial Rating
Range of Interest Rate
8.50% Onwards
Processing Fee Range
Up to 2%
Loan Amount
Rs 50 Lakhs & Above
Range of Loan Tenure
Up to 1 Year
Key Salient Features
- Liquidity Management
- Cash Flow Optimisation
- Financial Health Indicator
Documentation
- KYC: Aadhar Card, PAN Card, Passport-size Photo, Ownership Address Proof.
- Company documents: GST Registration Certificate, Udyam Certificate, Address Proof
- Financial documents: Latest 1-year current account statement, Latest 3 years complete set of CA-attested ITR with Acknowledgement Page, Certificate of Incorporation (COI), Balance Sheet, Profit & Loss Statement, Schedules, and if audited, then Audit Report – Form 3CD & Form 3CB.
- Tax documents: Form 26AS for the latest 3 years
Trivia
- In India, over 70 banks (Including both public and private banks, as well as foreign banks) provide Working Capital
- It takes an average of 15 – 20 working days for loan approval
USP’s
Operational Efficiency
Financial Flexibility
Cost Savings
Risk Resilience
Fee and Charges Details
- Processing fees – Up to 2 %
Disclaimer
- Your loan’s interest rate is subject to your CIBIL score. A higher CIBIL score may result in a lower interest rate.
- The approval and sanction of working capital facilities are subject to the bank’s internal policies, credit assessment, and fulfilment of required documentation.
What is Working Capital?
Working capital is determined by subtracting a company’s current liabilities from its current assets, as shown on the balance sheet. Current assets typically consist of cash, inventory, and accounts receivable, while current liabilities include obligations such as accounts payable, taxes, wages, and interest payable. Working Capital is also termed as Net Working Capital (NWC).
Components of Working Capital
Working capital is made up of two key components:
- Current Assets: These include cash, accounts receivable, inventory, and other assets which is expected to be converted into cash or used up within a year.
- Current Liabilities: These include short-term debts, accounts payable, and other obligations due within a year.
The balance between these components determines a business’s overall liquidity and financial health, with positive working capital indicating sufficient assets to cover liabilities.
Understanding Working Capital
Working capital plays a significant role in determining a company’s short-term financial health. It reflects the ability of a business to cover its day-to-day expenses, pay short-term debts, and manage operations smoothly. Positive working capital allows a company to invest in growth and expansion. However, if a company’s current liabilities exceed its current assets, it faces negative working capital, which can lead to difficulties in meeting the financial obligations, hinder growth, and even risk financial distress or bankruptcy.
MSME stands for Micro, Small, and Medium Enterprises. These are businesses classified based on their investment in plant, machinery loan or equipment finance options, and their annual turnover. Working capital for MSMEs refers to the financial resources needed to cover day-to-day operational expenses, such as inventory, receivables, and short-term debts.
| Loan Amount | Rate of Interest |
|---|---|
| Up to 10 Cr | 8.5% Onwards |
SMEs stands for Small and Medium-sized Enterprises. These are businesses that fall between small and large enterprises, typically defined by their size, number of employees, and/or annual turnover. Financial institutions, including those under government-backed schemes, provide loans specifically designed for SMEs. These loans play an important role in helping SMEs bridge the gap between their receivables and payables.
| Loan Amount | Rate of Interest |
|---|---|
| Up to 5 Cr | 8.5% Onwards |
Several government schemes are available to provide affordable working capital loans to businesses. These schemes focus on providing financial support to various sectors, including agriculture, manufacturing, and services. Some popular schemes include:
- MUDRA Loans: Specifically for micro-enterprises.
- CGTMSE Scheme: Provides collateral-free loans to MSMEs.
- Stand-Up India Scheme: Focuses on providing financial assistance to SC/ST and women entrepreneurs.
| Loan Type | Loan Amount | Rate of Interest |
|---|---|---|
| MUDRA Loans | Upto 20 Lakhs | 8%-12% |
| CGTMSE Scheme | Upto 5 Cr | 9%-12% |
| Stand-Up India Scheme | Upto 1 Cr | MCLR+3%+Tenor Premium |
An unsecured working capital loan doesn’t require any collateral. These loans are primarily based on the business’s financial health, creditworthiness, and cash flow, making them an attractive option for entrepreneurs who do not want to risk their assets. Despite the higher rate of interest compared to secured loans, unsecured working capital loans provide quick and hassle-free access to funds.
| Loan Amount | Rate of Interest |
|---|---|
| Upto 100 Cr | 9.5% Onwards |
Project finance refers to the financing of specific business projects that are expected to generate a return on investment. In this scenario, working capital may be needed to fund initial costs, manage the cash flow during the project lifecycle, and cover short-term operational expenses until the project becomes self-sustaining.
| Loan Amount | Rate of Interest |
|---|---|
| 10%-30% of the total project cost | 10% Onwards |
For startups, working capital is essential in covering the initial operational costs such as staffing, marketing, and inventory procurement. Start-up funding through various schemes and lenders ensures that young businesses can scale and establish themselves in competitive markets.
Government scheme for start-ups:-
- Startup India Seed Fund Scheme (SISFS) – Get up to 20 to 50 Lakhs.
Loan Amount Rate of Interest Upto 10 Cr 10%-11% p.a
MSME stands for Micro, Small, and Medium Enterprises. These are businesses classified based on their investment in plant, machinery loan or equipment finance options, and their annual turnover. Working capital for MSMEs refers to the financial resources needed to cover day-to-day operational expenses, such as inventory, receivables, and short-term debts.
| Loan Amount | Rate of Interest |
|---|---|
| Up to 10 Cr | 8.5% Onwards |
FAQs
Documents typically required for a working capital loan application include:
- KYC Requirements: Aadhar Card, PAN Card, Passport-size Photograph & Ownership Address Proof
- Company Documentation Required:
- GST Registration Certificate
- Udyam Registration Certificate
- Company Address Proof
- Financial Documents Required:
- Latest 3 years of CA-attested Income Tax Returns (ITR), including Acknowledgement Page, Certificate of Incorporation (COI), Balance Sheet, Profit & Loss Statement, and Schedules
- If the company is audited, then Audit Report, Form 3CD, and Form 3CB are also required
- Banking Documents: Latest 1 year of current account bank statements
- Tax Documentation: Form 26AS for the latest 3 financial years
Rates of Interest for working capital loans vary based on the lender, loan amount, tenure, and the borrower’s credit profile. Generally, the rates range from 8.5% to 15% per annum, but government schemes may offer lower rates.
A working capital loan helps businesses bridge the gap between receivables and payables, enabling them to meet daily operational costs, purchase inventory, pay employees, and more. It ensures smooth operations and helps businesses avoid cash flow disruptions.
Improvisation of working capital for a company are as follows:
- Reducing inventory levels
- Collecting receivables faster
- Extending payment terms with suppliers
- Tightening credit policies
- Managing operational costs efficiently
To calculate working capital, simply subtract current liabilities from current assets:
Working Capital = Current Assets – Current Liabilities
This calculation helps you determine whether your business has sufficient short-term assets to cover its obligations. A positive value indicates financial stability, while a negative value may signal potential liquidity issues.
Key Features of Our Working Capital Loans
- Flexible Loan Amounts: Tailored to your business needs.
- Quick Approval: Fast processing to ensure timely access to funds.
- Competitive Interest Rates: Affordable options for businesses of all sizes.
- No Hidden Charges: Transparent pricing with no surprise fees.
- Easy Repayment Options: Flexible tenure and repayment schedules.
Eligibility of a working capital loan typically depends on factors such as:
- Annual turnover and profitability.
- Existing debt levels and cash flow management.
- Valid KYC documents and business registration proof.
- Business Proof/Udyam Registration Certificate Number obtained through the Ministry of MSMEs.
- Bank Statement for the previous 6 months.
- Business vintage (usually 1-3 years or more).
- Credit score of the business or its owners
Apply for Working Capital Loan
4.9
434 Google Reviews
4.8
860 Justdial Rating
Loan Bazaar
#1 Choice
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Customers
4.9
434 Google Reviews
4.8
860 Justdial Rating
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