Working capital loan is a vital financial tool for startups, MSMEs, and small and medium businesses because it helps them manage day-to-day cash needs without interrupting operations. It allows companies to meet short-term liquidity requirements such as salaries, rent, raw materials, and other operating expenses while maintaining business continuity. With banks and NBFCs offering a variety of working capital schemes, businesses can access funds in different forms like cash credit, overdraft, or short-term loans according to their specific requirements.

These loans are particularly suitable for MSMEs that want to capture growth opportunities but face delayed customer payments or seasonal cash flow gaps. They also help startup companies stabilise their business in the early stages, support firms dealing with short-term cash shortages, and provide self-employed professionals with the liquidity needed to keep their practice or business running smoothly.