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How is The Working Capital Loan Eligibility Calculated?

Every business needs to figure out how to calculate working capital, to manage its diverse operations. The working capital refers to the cash flow maintenance within the organization. A typical working capital requirement would be buying or upgrading machinery. Working capital can be used for various other business requirements such as paying for utilities, managing inventory, purchasing raw materials, paying salaries, expansion, etc. Depending on the cash flow health, there may be a shortage of funds from time to time, and in such times, organizations try to find a working capital loan.

What is a Working Capital Loan?

A working capital loan is a credit facility or advance that helps businesses tide over their multiple short-term or day-to-day expenses. Businesses need to calculate their working capital before applying for the working capital loan.

How to Calculate Working Capital?

In simple terms, working capital is the difference between an organization’s current assets and its current liabilities. Assets denote an organization’s inventory, liquid cash, etc., whereas, liabilities can be described as unpaid debts, outstanding expenses, etc. To understand how to calculate working capital properly, therefore it is imperative to know the cash flow health, and how much liabilities can be paid off with the currently available resources. In other words, the working capital requirement dictates the working capital loan amount.

Benefits of a Working Capital Loan

  1. Such loans are mostly unsecured, and thus collateral-free.
  2. Flexible Loan Features
  3. Quick disposal
  4. Affordable rate of interest.
  5. Easy eligibility criteria

Leading lenders offer features like easy documentation, flexible repayment tenor of up to 84 months, the loan scheme also offers various flexible facilities. The loan applicant gets unlimited withdrawals with part-prepayments at nil charges. This facility enables applicants to pay interest only on the amount utilized by them, without the need to make fresh applications every time they make a withdrawal. You can also manage your loan account online with a customer portal that offers all the details pertaining to working capital loan accounts, at a single glance. This includes payment status, outstanding balance, account statements, and more. The portal also supports easy online payments and additional applications of funds.

Leading lenders like Bajaj Finserv offer unsecured business loans, ranging up to a maximum amount of Rs. 45 lakh, without any collateral. Fast disposal of loan is guaranteed, within 24 hours of application. To make the process hassle-free, it also offers pre-approved deals on various products such as business loans, personal loans, home loans, etc.

The 4 easy to meet eligibility criteria to meet a working capital requirement are as follows:

  1. Applicant’s age must be between 25 to 65 years.
  2. Applicant’s business must be operational for a minimum timeframe of 3 years.
  3. Income Tax Returns for the business must have been filed for that timeframe.
  4. In case the annual turnover of last year had exceeded 1 crore, the applicant must present financial statements audited by a CA professional.

Documentations needed for a Working Capital Loan

To avail of the speedy and hassle-free working capital loan from Bajaj Finserv, an applicant needs to submit the following documents:

  1. KYC documents
  2. Business records of 3 years.
  3. Certificate of practice.
  4. Bank statements of the last month.

 After knowing how to calculate working capital, businesses have different options of loan providers to choose from. However, it is recommended to opt for a loan provider who offers several flexible features, including ease of application, affordable rate of interest, minimal documentation, and completely transparent terms and conditions. An instant working capital loan with such provisions is definitely the ideal choice for business owners. They can manage numerous overhead expenses and sustain operations through cash-flow crises.

 

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