The different types of working capital include –
1. Permanent Working Capital
It is also known as fixed working capital or hard core working capital. Every business must allocate a fixed amount of funds as working capital. Available capital must not fall below this threshold. This minimum level of working capital is called permanent or fixed working capital.
2. Temporary Working Capital
The difference between the net working capital and permanent working capital can be termed as temporary or variable working capital. It is also called a variable or fluctuating working capital and changes as per the business’s operations and market situations. Also, it is closely related to the overall sales or production of a business.
3. Gross & Net Working Capital
Gross working capital amounts to business investment allocated for current assets. These assets are easy to convert within the business’s operating cycle.
A business’s net working capital is the difference between gross working capital and current liabilities.
4. Negative Working Capital
Calculation of net working capital results in either a surplus or a deficit. A shortfall or deficit is known as negative working capital and reflects an excess of current liabilities over current assets.
MSME stands for Micro, Small and Medium Enterprise. It was introduced by the Government of India in agreement with the Micro, Small and Medium Enterprises Development (MSMED) Act of 2006. As per this act, MSMEs are the enterprises involved in the production, processing or preservation of goods and commodities. Vital for economic growth, this sector contributes around one-third of the country’s GDP and generates employment for around 110 million of the population.
It also plays an important role in the socio-economic development of the country as many of these enterprises operate in rural India. According to the Government's annual report of 2018-2019, more than 6 lakh MSMEs operate in the country.
Initially, MSMEs were classified based on two factors - investment in plant/machinery and an annual turnover of the enterprises. However, the Ministry of Micro, Small and Medium Enterprises has recently revised the classification by combining these two factors into a single criterion.
The MUDRA loan is provided under the Pradhan Mantri MUDRA Yojana (PMMY) to non-farming and non-corporate micro and small enterprises. These enterprises can avail loans up to Rs.10 lakh under the MUDRA (Micro Units Development & Refinance Agency Ltd.) scheme.
We have discontinued this product (MUDRA Loan) at this time. Please reach out to us on +91-8698010101 to know more about the current financial services provided by us.
|Loan amount under Shishu||Up to Rs.50,000|
|Loan amount under Tarun||Rs.50,001 to Rs.500,000|
|Loan amount under Kishore||Rs.500,001 to Rs.10,00,000|
|Processing fees||0.5% for Tarun Loan, nil for others|
|Eligibility criteria||New and Existing Units|
|Repayment period||3-5 Years|
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