A working capital loan is a type of advance that helps a business fund its day-to-day or short-term operations. A working capital business loan can be used for various purposes.
Uses of working capital loan
• Procure raw materials
• Purchase inventory
• Pay for overhead costs like electricity, rent, salaries and other utilities
• Finance blocked payments from debtors
• Pay suppliers in advance
• Maintain a healthy level of cash
This form of financing is a good source of capital for small and medium enterprises (SMEs) and is especially suitable for seasonal or cyclical businesses that don’t have sustained or stable sales all year round and need liquidity (cash in hand) to meet their everyday operating costs.
Seasonal businesses manufacture during the off-season to be able to sell aggressively during the peak season. As a result, they receive a chunk of payments only during the peak season, while through the rest of the year, they need funds to sustain operations you can use a working capital loan.
There can be several times when your business can need small business working capital financing:
• Helps you manage sales fluctuations
• Acts as a cash cushion
• Prepares your business to take up a bulk order
• Stabilises and boosts cash flow
• Equips you to leverage business opportunities
To help you fuel your business’ growth, Finpair offers easy Working Capital Loans up to Rs.30 lakh at an interest rate starting from 18% that can be conveniently repaid across a tenor of 12 to 60 months.
