Along with infrastructure, government policy, marketing, machinery and technology, securing a loan is the most significant impediment to the growth of micro-small-and-medium enterprises (MSMEs) in our country. Moreover, capital is a constant problem for MSMEs, apart from knowledge gaps, a lack of collateral, lenders' low appetite for risk, and lenders’ lack of expertise.
Most MSMEs lack the necessary capital to finance their everyday functioning, and hence suffer from a severe cash crunch. But what if we tell you that we have a solution to fix this problem? Working capital loans are the ideal solution to help MSMEs manage the problem of cash crunch. Here’s how working capital loans work.
What is working capital?
Working capital is essentially the resources required to operate a company's day-to-day operations. For instance, money for raw material purchase, staff salaries, office maintenance, etc. A loan which is used to finance all of these operations is known as a working capital loan.
Check your eligibility for a Working Capital loan in just 1-minute!
Why do MSMEs face the problem of cash crunch?
MSMEs often face cash-flow issues resulting from slow-moving or wasteful inventory, which leads to insufficient stock or inventory control. In addition, overly generous credit terms, cash spent on unprofitable goods or services, and spending money on unnecessary things are some common reasons that lead to financial constraints.
What are the benefits of taking a working capital loan?
- Time is money for a company that operates in a competitive and fast-paced world. So, you don't want to waste time if you need to buy raw material to complete a large order or if you're getting a great deal on a vital input part.
- Conventional loans will stifle your progress under such circumstances. As a result, you may not be able to make a strategic decision that is time sensitive. This is where a working capital loan from a non-bank financial institution (NBFC) will help. Moreover, such loans can be obtained easily.
- One of the most important advantages of a working capital loan is investing the money however a business owner wants. When seeking venture capital or equity investment, the entrepreneur must share a comprehensive budget and obtain approval for spending. However, with a working capital loan, entrepreneurs are free to spend it as they please.
- Expenses are determined by the business's immediate and short-term needs, as well as cash availability. Therefore, a working capital loan is a good choice.
How to avail of a working capital loan?
At Kinara Capital, we offer collateral-free working capital loans to MSMEs engaged in the manufacturing, trading and service sector. Loans are disbursed within a day. The first step is to check your eligibility on our website which only takes one-minute. Following which a loan officer will connect with you and assist you through the rest of the process in your preferred language or you can continue with your application online.
Over 35,000+ MSMEs have availed a collateral-free business loan from Kinara Capital. This is due to our quick loan processing time that requires minimal documentation. MSMEs can get a business loan within 24-hours!
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