Repayment tenures for working capital loans usually range from 6 months to 3 years, allowing businesses flexibility in choosing a suitable repayment period.
● A working capital loan is a type of loan provided by banks or financial institutions to businesses to meet their day-to-day operational expenses and fund short-term operational needs.
● Working capital loans ensure that businesses have sufficient liquidity to manage inventory, pay salaries, cover utility bills, and handle other operational expenses.
Eligibility criteria for working capital loans may vary among lenders, but common approximate criteria include:
Required documents for working capital loan applications generally include:
Working capital loans can be applied for through various channels:
Repayment tenures for working capital loans usually range from 6 months to 3 years, allowing businesses flexibility in choosing a suitable repayment period.
Working capital loans are typically designed for short-term operational needs and are not intended for capital expenditure or long-term investments. For such requirements, businesses can explore other types of loans, such as term loans.
Depending on the loan amount and the borrower's creditworthiness, working capital loans may be available with or without collateral. Collateral can be in the form of property, machinery, or other acceptable assets.
While a low credit score may affect the loan approval process, some lenders specialize in providing working capital loans to businesses with lower credit scores. However, the interest rates and terms may be different compared to loans for businesses with better credit scores.
Yes, most lenders allow borrowers to prepay the working capital loan before the tenure ends. However, it is advisable to check with the lender regarding any prepayment penalties or charges.