How to get working Capital Loan:
To get working capital loan a business unit need to satisfy some criteria as required by the lending institutes. Business units generally avail working capital loan from Bank but now days so many online finance companies, provide business loan which is otherwise called working capital loan.
Working Capital Loan from Bank:
Working capital loan from bank is provided to the commercial firms/companies after assessing their requirement for fund to run the regular operation of the business.
For example the working cycle formula would help to understand the basis of assessment for giving the from bank.
In case of a manufacturing co : No of days in work in progress ( A)+ No of days of credit given to buyers ( B) minus no of days of Credit enjoyed from the material supplier (C) then,
Numerically, If A= 35, B=21, C= 20 =36 DAYS CYCLE of working capital. It means that the company is out of fund or need capital for 36 days to run the business.
The working Capital is the net of Current Asset – Current liabilities.
If bank find that the company has the capability to regularly service the interest & can generate adequate liquidity on the basis of above calculations and of course the overall performance of the company for a minimum period of 3 years without any adverse features in banking operation, the Loan from the Bank may be allowed to the company.
Can you get working capital loan instantly:
Working Capital loan unlike other personal loan or short term loan, is subject to verification of certain business data & information about the working pattern of the company applying for such credit facility for availing the loan from Bank.
But now a days some Finance companies operating through online platforms offer quick Business loan which they call working capital loan subject to verification of business credentials of the prospective borrower.
Since there is no physical submission of applications / documents/stock statement & time consuming process of stock verification done by bank, the companies may get their business loan which also they coined as working capital loan in shortest possible time.
Working capital loan process in India:
In India Working capital loan from bank may be availed as per the conventional process regulated by RBI guidelines applicable for the Bank branches. Here Physical submission of applications& all the relevant documents & in most of the cases details of collateral securities to be submitted to the bank to their satisfaction.
Alternatively Working capital Loan from online portals may be availed through submission of documents online to those companies by passing the requirement of physical process as enumerated above.
