What is a working capital demand loan?
Maintaining optimum working capital is essential to a business’s efficient running. A working capital demand loan is thus available as a flexible financing option that allows businesses to access funds during any capital shortage. This credit facility is readily available to fulfil the operational funding needs.
Available as one of the suitable sources of business finance, Bajaj Finance also offers a unique Flexi facility on a working capital loan. It enables multiple withdrawals from a pre-sanctioned limit, thus allowing access to funds when needed.
Interest rate on working capital loan
Bajaj Finance offers working capital loans at competitive interest rates to keep the repayments affordable. The other associated charges, such as processing fees, are also kept nominal for the borrower’s convenience.
Before opting for such a loan, you can use our business loan EMI calculator to compute the monthly instalments amount and plan repayments accordingly.
Alternatives to a working capital demand loan
There are suitable alternatives to working capital demand loans that offer quick and convenient financing. This helps businesses cover their working capital deficits.
Bajaj Finserv offers business loans as a suitable alternative to the working capital demand loan to fulfil the working capital funding needs as and when required. Here is a quick look at the features and benefits of the advance that make it a suitable option for business funding.
Flexi Hybrid feature
The Flexi Loan facility allows businesses to make multiple withdrawals from a pre-sanctioned amount, enabling ready access to funds. It also reduces the overall repayment liability as interest is charged only on the withdrawn amount.
Loans of up to Rs. 80 lakh
Eligible applicants can avail of high-value, collateral-free financing of up to Rs. 80 lakh at affordable rates.
Tenure flexibility: Opt for a suitable Tenure of up to 96 months for convenient loan repayment.
Quick financing: With minimum eligibility and document requirements, get approval within a few minutes of application. Get money in money within the next 48 hours* only.
No end-use restriction: Businesses can also use the funds for other financing needs like office renovation, machinery purchase, expansion plans, etc., along with working capital requirements.
Frequently asked questions
A working capital loan is a loan that has a fixed repayment schedule and a fixed interest rate. A working capital demand loan has no fixed repayment schedule and a variable interest rate. The interest rate of a working capital loan is usually lower than a working capital demand loan, as the lender has more certainty about the repayment.
Some examples of working capital loans are Term Loans, business lines of credit, invoice financing, and business credit cards. Some examples of working capital demand loans are packing credit, invoice factoring, and warehouse financing.
The difference between demand loan and term loan is that demand loan is a loan that has no fixed repayment schedule and can be demanded by the lender at any time, while Term Loan is a loan that has a fixed repayment schedule and a fixed interest rate. Demand loan is usually used for short-term business needs, such as working capital, raw materials, or salaries. Term Loan is usually used for long-term business needs, such as land, equipment, or office space.
WCDL (working capital demand loan) is a type of loan used by businesses to finance their day-to-day operations. It is usually provided by banks and other financial institutions within the assessed working capital limits of the borrower.
Some of the benefits of WCDL are:
- It helps businesses to meet their short-term cash flow needs and cover expenses such as inventory, wages, rent, etc.
- It offers flexibility and convenience as businesses can access funds when they need them and repay them according to their cash flow cycle.
- It can also be used for other purposes such as expanding operations, purchasing equipment, etc., depending on the lender’s terms and conditions.
