A Working Capital Loan is a type of loan that is designed to help businesses meet their short-term financial needs. It is used to finance day-to-day operations and provide financial support during slow periods.

Here are some key features of a Working Capital Loan:

• Purpose: The loan is specifically designed to provide short-term financial support to businesses to meet their operational expenses.
• Loan amount: The loan amount is based on the business's financial requirements and the lender's credit assessment.
• Repayment: The loan repayment is usually done through Equated Monthly Installments (EMIs) within a short repayment tenure, usually ranging from 1 to 3 years.
• Interest rate: The interest rate on a Working Capital Loan is generally higher than other types of loans as it is an unsecured loan.
• Documentation: The business must provide financial statements, tax returns, and other necessary documents to the lender for processing the loan.
• Collateral: A Working Capital Loan is usually an unsecured loan and does not require any collateral.
• Use of funds: The funds from a Working Capital Loan can be used for various purposes such as meeting daily operational expenses, paying off debts, etc.

A Working Capital Loan is a suitable option for businesses facing temporary financial difficulties or looking to meet their short-term financial needs. It is important to carefully consider the terms and conditions, repayment options, and the potential risks before applying for a Working Capital Loan.