Here’s how small businesses are expanding by taking Working Capital Loans

September 22, 2023
Updated on

Working capital loans are used to assist companies with day-to-day operations. Working capital can be compared to a company’s lifeblood; without it, the business would come to a standstill. This  highlights the significance of working capital for the survival of your business. It may be the difference between success and failure.

What does a working capital loan for small business mean?

Working capital refers to the current and short-term financial health of your business. In other words, it refers to whether the business has sufficient capital to finance the day-to-day requirements or not. If you do not have enough money to support expenses like renovation of your premises, paying employees’ salaries and purchasing raw materials, then taking working capital loans for small business will be beneficial for you.

Here’s why working capital loans for small businesses are important.

Insufficient cash flow is cited as one of the main reasons for the failure of businesses. A company’s failure might happen when the cash flow is inadequate to support wages, supplies, overheads, and other expenditures. This is mostly common in small and medium-sized companies. To cover upfront costs such as product growth, new location, space, new employees, and expansion, a significant amount of money is needed.

Let’s take a look at how working capital loans for small businesses can solve your problems.

Avoiding delay in payments

Untimely payments can have a severe impact on your business reputation. Some of your suppliers might even discontinue working with you in case of delayed payments. You need a way to avoid such situations by bridging payment gaps. Many successful entrepreneurs prefer taking a working capital loan as in such circumstances, since they are less expensive than paying credit card interest rates.

Timely payment of salaries

Your staff relies on you for the timely payment of their wages.In situations when you cannot pay salaries to your staff on time could take a toll on their day-to-day lives, and in turn, on your business. Often, small businesses do not get quick returns, and hence they do not have sufficient cash on hand. Taking working capital loans for small business can help you retain critical employees for your business by paying them salaries on time.

Buying inventory/raw materials

If you own a small business, you are likely to have experienced the need to overstock or buy inventory in advance. This is especially true for seasonal businesses. Working capital loans for small businesses are just perfect for fulfilling this need. 

Let us understand this with an example:

Manohar is a carpenter who uses a working capital loan to purchase his inventory, material, and products. Once he completes the order and gets his money, he repays the debt. Many other people like Manohar are taking working capital loans for small businesses.

Grow your MSME with collateral-free business loans

Kinara Capital is here for you

Kinara Capital provides fast and flexible working capital loans to small businesses. We provide business loans in the range of Rs. 2-25 lakhs to MSMEs in the manufacturing, services and trading sectors.

Why choose Kinara Capital?

  • Get your loan in 1 day.
  • Minimal documentation requirements.
  • No property collateral is required.
  • Personalised customer service.
  • Interest Rate: starting at 24% per annum, on a reducing rate basis. 
  • Loan Tenure: 12-60 months

What Kinara customers have to say:

Customer Name: Iliyas Sajed Memom

Company Name: Royal Enterprise

“We had been running the business for a few years, but when we applied for working capital loans for small business, all banks denied us. Kinara Capital approved our loan right away and gave us a second loan a year later. We had some relief in running our business and achieved a successful outcome. We were also able to increase the number of staff, as our number of customers and workload increased since taking the loan.

Customer Name: Saraswathy

Company Name: Saraswathy Steel

“When I started this business, we had 7 workers. Now, I am providing consistent jobs and livelihoods to 25 workers, and they are so delighted. Kinara is the reason for my business growth. I hope that Kinara Capital will continue to help meet our business needs in the future. I would recommend for everyone who needs it to take working capital loans for small business from Kinara Capital.”

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