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FAQs on Working Capital Finance

FAQs on Working Capital Finance

Businesses face cash crunch frequently. So the major requirements for funding are from Micro, Small, and Medium Enterprises (MSMEs). The need for funds can be for paying dues, purchasing assets, running the business, expanding, etc. So, To overcome such issues, working capital can be the perfect solution. Working Capital Finance helps in short-term operations. It also allows one to run operations smoothly and efficiently.

1. What is the tenure in working capital finance?

Working capital finance is a short-term loan. It is majorly used for managing the operational expenses of a business. Normally, the loans are offered for a period of 12 months. So, the criteria depend upon the lender. Also the requirement of the borrower.

2. What are the benefits of working capital finance?

The major benefit for borrowers is that it smoothens the fluctuations in the cash flows of business operations. And thus processes funding quickly. The working capital instruments have flexible repayment facilities. So, it gives an advantage to the borrower.

3. What do lenders look for in a potential working capital borrower?

The major potential required from the borrower in the case of secured funding is collateral. Whereas in the case of unsecured funding, it depends upon the creditworthiness of banks and tracks the record of the borrower.

4. How much is the interest charged?

The interest depends upon the amount of the funds, the creditability of the borrower, and the repayment history of the borrower. Hence, the interest differs from case to case and lender to lender.

5. Which working capital instruments do we offer?

Terkar Capital arranges a variety of products in debt funding. We assist the clients in choosing the best suitable one.

Below is the list of our instruments of working capital finance:
  • Cash Credit Facility
  • Bill Discounting
  • Factoring
  • Letter of Credit Discounting
  • Overdraft Facility
  • Bank Guarantee

6. How is the repayment criteria in working capital finance?

The repayment criteria depend upon the mutually agreed terms and conditions between the buyer and the lender. It can be through EMIs or as and when the borrower gets cash.

7. Is collateral compulsory for working capital finance?

The type of funding, whether secured or unsecured, totally depends upon the availability of collateral. Also, if available, the amount of the fund and the value of collateral should be matched. The only difference between both fundings is the rate of interest. Thus Secured funding will fetch a low ROI as compared to unsecured due to the presence of collateral. Terkar Capital will help you with a reasonable cost of borrowing from their clients.

8. Who provides a working capital finance facility?

The banks, NBFCs, and financial institutions provide the working capital facilities. The eligibility, repayment terms and documentation varies according to the respective lenders. We help to bridge the gap between eligible borrowers and capable lenders.

9. How does Terkar Capital helps?

Terkar Capital is among the financial firms, that arrange financial instruments for corporate clients. We assist you in arranging working capital finance without hassle. We understand the customer’s needs, So as to provide the perfect financial solutions accordingly. Here the executives are highly trained. We work enthusiastically for providing services with ease. Our timely and confidentiality in service makes us different and unique from others. Working capital is one of the financial products where we have expertise. So whenever it is fundraising, Terkar Capital is ready to serve you at best!!

Understand the process of Working Capital Finance Case Study.

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