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Tata Capital > Blog > Wealth Services > Planning to avail a working capital loan? It just may be the best thing for your business

Wealth Services

Planning to avail a working capital loan? It just may be the best thing for your business

Planning to avail a working capital loan? It just may be the best thing for your business

Small and medium-sized businesses are run by passionate entrepreneurs. They tend to go all out to solve a problem or capture an opportunity. Such an approach delivers significant gains, but can also catch you off-guard if everything doesn't go as per plan.

In life, some things are beyond our control. The same principle also applies to businesses. Irrespective of every plan and budget, you as an entrepreneur, will face trials and tribulations, especially when it comes to the funds. To plug gaps, business owners regularly borrow funds in the form of a working capital loan. Not only does this form of business credit help in averting a crucial but temporary problem, it also allows the business to focus on its priorities.

In short, working capital funding is can be the anchor that can keep the business afloat.

Working capital is the key

How can working capital loans help?

It is a fact that every company needs working capital. Some have a positive working capital whereas many businesses have a negative working capital. To calculate working capital, subtract current liabilities from current assets and you get your working capital. For instance, if your current assets are Rs. 40 lakh and current liabilities are Rs. 48 lakh, you will have a working capital gap of Rs. 8 lakh.

It basically determines the health of your business. However, a positive working capital indicates that the business is doing well without any outside debt, negative working capital is no means an indicator that the business is failing. Unexpected conditions often push businesses to have a gap in their working capital. Working capital represents a business’ financial efficiency. This efficiency is monitored in terms of how they deal with payroll, inventory purchases, and other expenses.

This is when a working capital loan can come in. For those who are facing a cash crunch, a working capital loan can be the answer to the funding problems.

A working capital loan can help entrepreneurs tide over any deficits faced by the business. This, being an unsecured loan, is considered as a business loan and if you are looking for a quick working capital loans, consider a reputed NBFC such as Tata Capital to address your funding requirements.

While everyone keeps talking about working capital loans, how can it be beneficial to you?

Well, for starters, it can help you tide over the financial crunch that you are presently going through. If you need to pay your suppliers or even pay salaries to your employees, this money can help you with that. You can also use the working capital loan for buying new raw materials, upgrading your existing machinery or even buying new machines to increase the existing capacity.

Since SME loans are easily available and with minimum documentation, you can easily avail a working capital loan.

Loan Specifics

While many NBFCs let you avail a working capital loan, there are few things you should always be aware of. Tata Capital, too disburses, working capital funding to the borrower and comes without any strings attached.

You will need to provide minimal documentation to make sure you are eligible for the working capital loan. A high-eligibility factor is one way you can avail working capital funding. To know more about the documentation, you can get in touch with one of Tata capital’s representative by visiting our website.

As a small business owner, NBFCs like Tata Capital gives you the option and convenience to customize your monthly loan repayment instalment. This functions as a structured EMI concept where the borrower pays in a manner best suited for their company's cash flow.

Tata Capital design solutions on a case-to-case basis. In other words, high-end tailored and customized working capital finance solutions are made available as per the industry and business requirements of the applicant.  Moreover, they are flexible with regards to the loan amount as well as eligibility to the tenure period know more and to apply for one.