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Tata Capital > Blog > Wealth Services > Which type of companies are eligible to get a Working Capital Loan

Wealth Services

Which type of companies are eligible to get a Working Capital Loan

Which type of companies are eligible to get a Working Capital Loan

Covering the everyday costs of operations can, at times, pose a challenge to your business. A failure to do so can threaten the very existence of your company, potentially leading to insolvency. A working capital loan can help prevent business stagnation by covering critical operating costs and allowing your finances to flow smoothly. Here are a few ways in which a working capital loan can benefit your business.

Benefits of a Working Capital Loan

A working capital loan can help a company manage fluctuations in sales, provide liquidity, enable scaling of operations, leverage business opportunities, and allocate its resources more effectively. It does so by freeing up the availability of liquid funds and thus reducing the burden on existing resources. Since managing resources effectively helps a company’s stability, it’s important to identify suitable loans according to respective business requirements.

Tailor-made Tata Capital’s working capital loans serve this exact purpose. These loans are customised, have a flexible repayment tenure, improve business liquidity and are disbursed quickly. With the help of working capital loans, your company can quickly scale operations, as opposed to simply relying on revenue to fund growth. The companies that are eligible to get a working capital loan in India are discussed below.

Companies eligible for Working Capital Loans

In order to receive working capital funding in India, a business must have been in operation for a certain number of years and should have a certain annual turnover. These requirements, however may vary based on the type of business. The type of companies eligible for working capital funding in India includes sole proprietorships, partnerships, private and public limited companies. The funding parameters for each type of company vary across financial institutions. Tata Capital, for instance, offers unsecured working capital loans up to Rs. 7 crores (based on the turnover as indicated by GST returns).

Further, companies can also be classified based on their position in the supply chain. Distributors, dealers, and buyers of goods and services from corporates, for instance, usually avail channel financing to improve business relationships with their channel partners. Suppliers, on the other hand, may face issues with outstanding invoices and therefore look to capital invoice discounting solutions. In the case of SMEs or start-ups, suppliers may also seek purchase order funding to gather enough funding and fulfil existing orders. Ultimately, almost every company in the supply chain process is eligible to get a working capital loan.

Tata Capital offers each type of company a variety of different working capital funding solutions. The working capital demand loan, for instance, is a general working capital loan that is available to all such companies and helps finance employees, rent, inventory, among other short-term obligations. Regardless of the type of company, working capital funding can help your business to not just stay afloat but ultimately grow in the long run.

Apply for easy working capital loans with flexible tenures today!