How To Organise Your Working Capital?

Publish Date : 2020-05-08

How To Organise Your Working Capital?

India is a country of 1.3 billion population, and unemployment is a big issue. Like any other developing country, India also has a vast number of business owners scaling from small enterprises to huge industries.

Small business owners play a role, as important as big industrialists, in the development of any nation. These small businesses are called MSMEs which do not have a lot of capital support and mostly work in small towns or cities. Like all businessmen, these MSME owners also want to grow and multiply their profits. This majorly involves a good amount of capital investment which sometimes these individuals are incapable of.

Business loans for small businesses are often the go-to-go option for these individuals. But small business loans have criteria and requirements that these small-scale business owners need to fulfil.

But there are several other options as well. Let’s take a look at these options so that you can effortlessly choose the best option for your small business.

Bank Loans

Banks have been the traditional option for loans for all kinds of businessmen. Banks do offer these businessmen loans of all ranges of amounts and interests. But their procedure is a lot fussy and takes a lot of time to process. So for individuals who need an instant business loan, a bank loan is undoubtedly the right option.

Banks ask these individuals to fill out a lot of forms and submit n number of documents which makes the process a lot complex for these business owners. Sometimes, the procedure requires one month to sanction a loan for business. In fact, in some cases, it takes more than a month. This is a negative factor for the small business owners as they cannot afford to lose any business days in order to keep running here and there just to fill out business loan forms and submit different documentation for business loans. 

Informal Investors

Borrowing loans from zamindars have been in practice since the existence of feudalism. The small scale business owners sometimes opt for this option as it offers some flexibilities with its business loans. The private investors usually charge a high-interest rate and look for a collateral. The individuals that own small businesses do not have sufficient assets to offer as collateral and hence, fail to be eligible for private funding of capital to grow their businesses. The process of getting a business loan sanctioned from an informal investor is not very fussy. In fact, it is very easy. It does not even take a lot of time.

But, as the small business owners are not potent of paying back loans with a higher interest or offer collateral as a guarantee for the loan amount, they find it hard to avail a business loan from this source of lending.


Non-banking financial companies or NBFCs are those who offer business loans to small business owners very much according to their requirements. NBFCs mostly focus their business of lending capital on these MSMEs and help them to grow their business.

Availing a business loan from them does not require a business owner to offer collateral, which is a silver lining for them as they own small businesses and can’t afford to offer security. The lower interest rates are also one of the perks of availing a loan from an NBFC.

The procedure of documentation and filing credentials is also not a very lengthy process. To get a loan sanctioned from an NBFC, it takes not more than a time period of a few working days. The process of the business loan application can be as simple as sitting at home and carrying out all formalities from a smartphone's App; there is no need to visit the NBFC office personally.

Small business owners need to organise working capital to sustain their business, and it is natural for them to opt for business loans due to lack of financial resources. Getting a business loan is not rocket science. With the help of a business loan calculator, they can be evaluated according to the flexibilities of the individual to repay the loan.

The option of choosing a business loan is not very confusing and are very distinct from each other. An individual only has to go for the lender that best suits their abilities to repay the loan. It is surveyed that small business owners are now opting for NBFCs more than other options. NBFCs are flexible with their needs and abilities, overlook the lack of collateral, and charge lower interest rates.

Category :business
Author Website : Ziploan

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