A working capital loan offers credit to business organisations, whether small, medium, or large, to fund their day-to-day operations.
Depending on the urgency of need and everyday demands of the business, there are several ways a working capital term loan can be used. Some of these are:
Purchasing raw materials
Making advance payments to suppliers
Buying inventory
Funding accounts receivables if payments from debtors are delayed
Meeting overhead expenses such as salaries, utility bills, and rent
The working capital loan eligibility criteria essentially depend on the lender. However, there are some common requirements, such as:
The applicant should be at least 25 years old
The business vintage should be at least three years
Income Tax Returns and other related information
Should not be a blacklisted entity
Trusts, NGOs, and MSMEs cannot apply
You may need to provide additional information for business verification purposes. So, be sure to check the requirements before applying. This will help you have a seamless process.
The interest rate levied on a working capital loan is determined by several factors such as the type of business, business vintage, business revenue, and more. You can avail a working capital loan for your business from any of Bajaj Markets lending partners at interest rates starting from 12% p.a. The application process for the loan is simple and hassle-free and requires minimal documentation.
You can apply for a working capital loan offline or online. To apply for a working capital loan digitally, you can follow these steps.
Go to the lenders’ website and select the ‘Business Loans’ option
Click on ‘Apply Now’
Fill in the digital form with your business details and proceed further
Enter the loan amount and select a suitable tenure
Submit KYC documents, such as Aadhaar card, PAN card, voter’s ID etc.
Submit the required business and individual documents.
To apply offline, you can visit the nearest bank branch and submit an application form and the required documents. Before applying, you must ensure that you meet all the eligibility requirements and have all the documents ready.
You can get up to ₹50 Lakhs as a working capital loan on Bajaj Markets. The quantum of the maximum available loan amount is decided based on the health of the business, revenues and relationship with the lending partners.
You must be in the age group of 25-70 years.
Acquiring financing for letter of credit, cash credit, overdraft facility, and invoice financing are some examples of a working capital loan. You can opt for any of these types of loans as per your business requirements.
These loans allow you to cover everyday operations and business financial requirements without any hassles. You can take an SME working capital loan for urgent funds to pay bills, workspace rent, pay advance business payments, need an advance to get material, etc.
The limit is usually up to ₹50 Lakhs. However, it also depends on the lender you choose and the working capital loan eligibility criteria set by them. Creditworthiness, business vintage, and finances are some factors affecting the maximum loan you can get.
To calculate your working capital, you need to subtract your current liabilities from the current asset value. So, working capital = current asset - current liabilities.
Here, assets include the company stocks, advances in hand, and additional cash or assets that are liquid and can help meet business requirements. In contrast, liabilities include any short-term debts and expenses, such as paying creditors, interest, utility needs, and more.
The risk of these loans depends on the type of loan you get. An unsecured working capital loan comes with a higher interest rate. As such, the borrowing costs are high. Moreover, any missed payments can hurt your creditworthiness and, thereby, your ability to borrow in future.
On the other hand, a secured working capital loan puts your asset at risk. This is because if you default, the lender can seize the asset to recover the loan. You can avoid these risks by optimising your borrowings and ensuring that fits your current and future finances.
The charges vary across lenders. So, be sure to check and compare before applying.