Irrespective of the size and type of business you own in the industry, it is essential to have access to funds to keep it running. Whether you want to make salary payments or make capital expenditure, you need funds. However, getting access to funds is not easy. The one thing that all businesses have in common is the need of funds and the first thing that comes to mind is to borrow money. It makes no sense to borrow from friends and family and pay a high interest to them. Instead, you can consider applying for a working capital loan from a reliable financial institution. Let us take a look at the features of a working capital loan in India.
1. Immediate access to funds
When you apply for a working capital loan, you can get immediate access to funds and you do not need to wait for long. The lenders understand the urgency with regard to the loan and they will approve it without any delay. There is no tedious loan application procedure or documentation requirement. Your loan will be approved in no time and you will get instant access to funds. This makes the loan one of the most preferred choices of borrowers in the country.
2. Short term loan
The loan is short term in nature and you will have to repay it within a few months. Hence, if you are planning to invest in capital expenditure or use the funds where it will remain blocked for a few months, it might not be the right choice for you. Since the working capital requirements of businesses vary from time to time, this loan is only short term in nature.
3. Specific end use
Working capital loan has a specific end use and you cannot use the funds for any other purpose in the business. If you need funds to make salary payments, pay the suppliers or pay for utilities, you can apply for the loan. The loan funds cannot be used for capital expenditure.
4. Low interest rate
You can enjoy the loan at low interest rate. This will reduce the cost of borrowing and make it easier for you to repay the loan in time. However, it is best to compare the rate of interest offered by different lenders before proceeding with the application.
5. Suitable for all businesses
All sizes and types of businesses need working capital and the loan is suitable for all businesses. Even a large organisation will feel the need of working capital and so will a startup. The loan is designed to help every type of business in the industry and it has friendly terms and conditions that make it the first choice of many.
These are some of the common features of working capital loan you must keep in mind. It is one of the first choices of many business owners in the country and helps meet the immediate need of funds for a business. Look for a reliable lender in the industry and apply for a loan.