Working Capital Loan

What is a working capital loan ?

 

A working capital loan is a loan availed to fund the daily operations of a business including regular bills that need to be paid, cash flow requirements, employee salaries, and other everyday costs. A working capital loan makes short-term cash available to fulfil a business's short-term operational needs. The businesses with high seasonality or cyclical sales cycles rely on working capital loans to help them with periods of reduced business activity.

 

Many times the business does not have adequate liquid funds to cover the operational expenses. Working capital loans are corporate debt borrowings used to finance the day-to-day expenses.

 

For instance, many manufacturing units struggle during the fourth quarter to pay for their operational expenses as this is the lean business period and there is a shortage of short-term cash flows. A working capital loan comes in handy during such situations.

 

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Eligibility & Documents Required

 

When applying for a working capital loan, make sure you meet the business loan eligibility requirements below:

  • You must be at least 25 years old and less than 65 years
  • Your business must be profitable for 3 consecutive financial years
  • Your turnover needs to show an upward trend
  • Your balance sheet must be audited by a registered chartered accountant

Also, make sure that you have all the relevant supporting documents listed below before you apply.

  • Know Your Customer (KYC) Documents - Address, Age & Nationality proofs like Passport, Aadhaar, PAN card and other documents of the Directors or Partners.
  • Proof of Business (ITR/Trade License/Establishment/Sales Tax Certificate)
  • Sole Proprietorship Declaration or certified copy of Partnership Deed
  • Certified true copy of Memorandum and Articles of Association
  • Bank statements for the last 6 months
  • Income Tax Returns along with computation for last 3 years
  • Audited Financials for last 2 years
  • Qualification Documents such as degrees of graduation & higher education

Fees and Charges

 

The interest rate to be charged on working capital financing varies from case to case depending on the facilities offered, the financial position of the borrower, etc. Exact details can be provided by your relationship officers.

 

How to Apply for a Working Capital Loan?

 

You can apply for our working capital loans in 3 easy steps:

  • Check your loan eligibility
  • Select the loan amount and tenure
  • Submit your application and supporting documents

 

Once we receive a completed form and the relevant documents, our working capital loans are usually disbursed in 3 days.

 

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Why Tata Capital ?

 

If you're looking for easy, hassle-free working capital loans that offer you complete transparency and convenient repayment options, opt for Tata Capital equipment loans. We provide multiple benefits to our customers such as:

  • Transparent Interest Rates: Interest rates for business loans are dependent on multiple factors such as borrower credentials, the tenure of the loan, market dynamics, cost of funds, etc. Tata Capital provides complete transparency with respect to your business loan interest rates so you can plan your financials better.
  • Multiple Loan Programs: Tata Capital offers multiple loan programs, assessed by a team of experts based on banking, cash profit and turnover. Even qualified professionals can apply for a suitable business loan.
  • Hassle Free Loan Disbursement: With Tata Capital business loans, you get to benefit from an easy and quick loan disbursement. Once you submit a duly-filled application along with relevant supporting documents, business loans are usually approved within 3 days.
  • Flexi EMIs: Tata Capital's Flexi EMI option allows you to select a repayment method that suits you well. You can opt for increasing your EMIs each year, or reduce them gradually or even repay your loan periodically to reduce your EMI.

 

FAQs

 

Q: What is the maximum working capital loan you are eligible for?

A: We offer working capital finance by way of WCTL or WCDL, after carefully assessing your business needs and risk profile.

 

Q: How much EMI do I need to pay?

A: You can use our EMI calculator to calculate the EMI you want to pay based on your convenience.

 

Q: What documents do I need to apply for the loan?

A: Here is a list of the relevant supporting documents you need to apply for a working capital loan.