A business owner must understand how to handle working capital effectively. Poor management of operating expenses can result in a decline in revenue or possibly the liquidation of the company. Working capital management requires keeping track of cash flow, accounts receivable, accounts payable, inventory, and short-term debt. By managing these parts of the firm, business owners can ensure that the company has enough finances to cover its expenses while still leaving room for future expansion.
Here are a few sources of working capital for businesses:
- Business loan
One of the primary sources of working capital is a business loan. You can explore secured and unsecured loans to take care of your expenses. If you do not have any collateral to pledge or a guarantor, an unsecured loan is a good finance option.
Bajaj Finance provides business loans of up to Rs. 80 lakh, without any collateral. The online loan application process is easy and hassle-free. Loan features like the Flexi Loan facility make repayments easier. You can choose to pay interest-only EMIs in the initial tenure of your loan period. You pay interest only on the amount that you use from your assigned loan amount.
- Factoring
A means of finance that offers cash advances against accounts receivable is known as factoring. It assists businesses with cash flow issues by turning accounts receivable into cash. Factoring shortens the time between invoice payments and the delivery of goods or services.
- Early payment discounts
Early payment discounts are a method of minimising a company's days payable outstanding (DPO), and thus the time it takes to pay its debts. By paying suppliers in advance, a company may obtain discounts and generate savings that the company can use as working capital.
Finally, working capital is critical for the growth and long-term viability of a business. Having a consistent flow of working capital is critical for meeting daily expenses and managing cash flow.
Manage your working capital carefully to ensure that your firm works smoothly and efficiently. You need sufficient finances to reach your growth targets. Evaluate the various sources of working capital to grow your company's operations. A business loan from Bajaj Finance can be one of the finance options.
