Introduction to Working Capital Loans
In 2025, working capital loans provide essential funding for businesses to manage daily operations, inventory, payroll, and short-term expenses. Loanpao explores financing options to ensure business continuity and growth.
Types of Working Capital Loans
Short-Term Working Capital Loans
Loans up to ₹50 lakh at 12–18% p.a. for immediate operational needs, repayable within 1–2 years.
Overdraft Facilities
Flexible credit lines up to ₹1 crore at 10–15% p.a., allowing withdrawals as needed.
Invoice Financing Loans
Loans up to ₹75 lakh at 11–16% p.a., using unpaid invoices as collateral for quick cash flow.
Comparison of Working Capital Loan Options
Key financing options for working capital in 2025:
| Loan Type | Loan Amount | Interest Rate | Tenure | Key Feature |
|---|---|---|---|---|
| Short-Term Working Capital Loans | Up to ₹50 lakh | 12–18% p.a. | 1–2 years | Quick disbursal for urgent needs |
| Overdraft Facilities | Up to ₹1 crore | 10–15% p.a. | Flexible | Withdraw as needed |
| Invoice Financing Loans | Up to ₹75 lakh | 11–16% p.a. | 1–3 years | Uses invoices as collateral |
Note: Rates and terms vary by lender and business profile.
Benefits of Working Capital Loans
These loans offer:
- Quick access to funds for operational expenses.
- Flexible repayment options tailored to cash flow.
- Support for managing seasonal demand or unexpected costs.
- Potential to improve credit score with timely repayments.
- Ability to maintain business operations without depleting savings.
Tips for Securing Working Capital Loans
Improve your approval chances:
- Business Plan: Present a clear plan showing revenue and expense projections.
- Financial Records: Provide audited financials and bank statements.
- Collateral: Offer assets for secured loans to reduce interest rates.
- Credit Score: Maintain a score above 700 for better terms.
- Lender Comparison: Use Loanpao to compare banks and NBFCs for optimal offers.
Frequently Asked Questions
Loans to finance daily business operations, inventory, payroll, or short-term expenses.
Some require collateral, but unsecured options are available for eligible businesses.
Disbursal typically takes 3–7 days, depending on documentation and lender policies.
Yes, startups with a solid business plan and revenue proof can qualify.
Loanpao connects businesses with lenders, offers EMI calculators, and provides eligibility guidance.