General Finance

Difference between Working Capital and Startup Loans

The Difference between Startup and Working Capital Loans

Startup capital or loan is the amount that is needed to setup a business operation whereas a Working Capital Loan is the amount needed to run the business.

Companies looking for Startup Capital cannot get finance through invoice factoring because they do not have an open Accounts Receivable. That is the reason these companies require assistance from a government plan, such as the Startup India and Make in India initiatives, or from an Angel Investor.

A Working Capital Loan is different. Your working capital is the amount needed for running your day to day operations in a productive manner. Ideally, a business earns its working capital through daily transactions. However, there are several scenarios under which deriving your working capital funds from the sale of products and services becomes difficult. For example, if your profit margins are not enough to cover other expenses or your organisation suffers from over-employment or there is a considerable delay between the time of sale and time of receiving payments.

Anyhow, such scenarios necessitate applying for a working capital loan.

For Investment in Your Startup

When you seek investment under the government sponsored schemes, you need to satisfy certain conditions set by the policy.  For example, under the Startup India initiative, you need to satisfy up to 6 conditions to just qualify as a startup. After which, you have to go through another process for funds credit.

It is a time-consuming process if you are seeking an immediate access to funds for execution or management of your business goals. On the other hand, if your business has had a successful 6 months run, you can go for a Lendingkart unsecured business loan.

Lendingkart’s collateral-free business loans offer quick short-term finance for your budding venture. These business loans are offered with flexible interest rates to ensure that your re-payment schedule is easily manageable and business friendly.

For Getting Working Capital Loans

Lendingkart Finance offers working capital loans of up to ₹1 crore for small businesses across India. The Lendingkart business loan application process is completely online and can be completed within minutes after signing up.

We require minimal documentation and sanction business loan disbursals within 3 days of document verification. Simply download the Lendingkart app on your smartphone or visit our website to apply for one.



Lendingkart Group

Authored articles on business, finance and corporate news from the Lendingkart family.