Accelerate Your Business With Working Capital
Working capital infuses new life into a struggling business and helps it realise an array of expansion and growth aims.
Most people start their own businesses because they wish to have greater control over how they utilise their inherent talents to make their mark in the world. Many companies start off small but are able to develop over the months and years into profitable ventures.
However, every business can hope to progress when it has sufficient financial backing. Lack of funding can derail many a well-laid financial plan. Some projects might not materialise, some clients might not settle payments on time, or there might be another financial crisis. At these times, the company can tide over the problem for a short space of time by taking working capital finance or a business loan.
The benefits of taking a business loan
Though your company might have bright prospects and be on the track to finishing many major projects, there is always a need for spare funding at key moments in the business cycle. The company may be on the brink of bagging a major contract, or might just require money to run the office for a few months. Lack of funding can decelerate the rate of growth, and set your company back by several months in achieving its goals.
Whether a new company or an established one, every business needs timely funding to keep itself on track for achieving its aims. This funding can be procured from the bank, by way of working capital finance loans.
Working capital loans help keep the office running (paying overheads, staff salaries, etc.), pitching for new contracts, completing ongoing projects, etc. The business loan can be repaid quite easily when the company revenues stabilise, and with banks offering easy repayment solutions.
Leading banks offer the following working capital solutions:
* Term loans: These are loans granted for a total period of 5 years. The applicant company must have a good credit history and a working plan for at least the next one year to show the bank. Term business loans are ideal for companies looking to upscale operations or who are negotiating for a long-term major contract.
* Cash/credit overdraft: This is a working capital finance loan offered to companies that have a healthy annual turnover for at least three consecutive years. The bank works closely with the business, issues an advisory on the company’s revenue requirements and guides it on planning finances.
* FD-backed loans: Leading banks in India offer companies the chance to explore funding options against the business fixed deposit account opened with them. The company can borrow up to 90% of the FD amount already deposited with the bank. The business is charged the same rate of interest on this business loan as the FD rate of interest.