Basis of Differentiation Term Loan Working Capital Loan
Purpose Term loans are usually taken for business expansion equipment purchases and office renovations. Working capital loans are usually taken to tide over a cash crunch and meet day to day expenses.
Interest Rate These come with comparatively lower interest rates These come with high interest rates.
Loan Amount These have comparatively bigger loan amounts. These have a comparatively smaller loan amount.
Loan Tenure These have a longer repayment tenure. These have a shorter repayment tenure.
Collateral These typically require collateral. These don’t require collateral.
Repayment Flexibility These require regular EMIs. These offer flexible repayment options.