Boost Your Business with Working Capital Loans

in businessloans •  4 months ago

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Working capital finance is an essential component that helps companies scale the growth matrix faster. This article examines why it may be time for your company to explore the business loan option.

As an entrepreneur, you have several plans in place to ensure your company’s growth and progress. But not every plan goes as per your intended script! Sometimes, certain contracts fall through at the last moment, or a project you were confident of bagging doesn’t come your way. If proposed plans fail to materialise, then it can have a severe impact on your daily operations. Your revenues will be affected, and you may be forced to rethink a lot of things to keep operations afloat.

But instead of cutting corners and taking many hard decisions for a few months, it would be much simpler to tide over this phase with a working capital loan from your bank.

Taking a loan to make money: How does it work?

It is a financial maxim that one must not borrow money to repay money. But the nature of business is such, that if one cycle of operations brings profit, then the next cycle may bring no revenues at all. It sometimes becomes essential to borrow a business loan, provided it is within reason. Borrowing working capital finance makes a lot of sense if you are certain of bagging a project or contract that can repay the loan soon. It is not prudent to borrow the business loan if your future prospects are still shaky – and most leading banks will ask for your business plan before considering your request for a working capital loan, anyway.

A business loan can help you upscale operations, hire new talent and machinery, invest in more space, and

Working capital finance is an essential component that helps companies scale the growth matrix faster. This article examines why it may be time for your company to explore the business loan option.

As an entrepreneur, you have several plans in place to ensure your company’s growth and progress. But not every plan goes as per your intended script! Sometimes, certain contracts fall through at the last moment, or a project you were confident of bagging doesn’t come your way. If proposed plans fail to materialise, then it can have a severe impact on your daily operations. Your revenues will be affected, and you may be forced to rethink a lot of things to keep operations afloat.

But instead of cutting corners and taking many hard decisions for a few months, it would be much simpler to tide over this phase with a working capital loan from your bank.

Taking a loan to make money: How does it work?

It is a financial maxim that one must not borrow money to repay money. But the nature of business is such, that if one cycle of operations brings profit, then the next cycle may bring no revenues at all. It sometimes becomes essential to borrow a business loan, provided it is within reason. Borrowing working capital finance makes a lot of sense if you are certain of bagging a project or contract that can repay the loan soon. It is not prudent to borrow the business loan if your future prospects are still shaky – and most leading banks will ask for your business plan before considering your request for a working capital loan, anyway.

A business loan can help you upscale operations, hire new talent and machinery, invest in more space, and also bid for a big project where you may need to pay earnest money or a tender deposit.

How to get a working capital loan

  • The business loan can temporarily improve cash flows and provide working capital till your company finds its feet again.
  • The working capital loan is granted only after due consideration by leading banks. If you have got the loan, it means that your credit worthiness is high, and that the market does not consider your company a ‘flight risk’.
  • The bank will be quite stringent when granting working capital finance to new companies. You will be asked to furnish company credentials (PAN, GST number, VAT number and Professional Tax certification), report outlining turnover since inception and future business plan, IT returns for two years, profit and loss statements, audit reports (if applicable to your business), details of other business loans (if applicable), etc.
  • The bank will also check your eligibility criteria before processing the request. You can apply for the business loan online from leading banks, after inquiring about rate of interest, processing charges, terms of repayment, documentation process, etc.

also bid for a big project where you may need to pay earnest money or a tender deposit.

How to get a working capital loan

  • The business loan can temporarily improve cash flows and provide working capital till your company finds its feet again.
  • The working capital loan is granted only after due consideration by leading banks. If you have got the loan, it means that your credit worthiness is high, and that the market does not consider your company a ‘flight risk’.
  • The bank will be quite stringent when granting working capital finance to new companies. You will be asked to furnish company credentials (PAN, GST number, VAT number and Professional Tax certification), report outlining turnover since inception and future business plan, IT returns for two years, profit and loss statements, audit reports (if applicable to your business), details of other business loans (if applicable), etc.
  • The bank will also check your eligibility criteria before processing the request. You can apply for the business loan online from leading banks, after inquiring about rate of interest, processing charges, terms of repayment, documentation process, etc.
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