Know about the Finance and Investments Terms

Kolhapur, a small district in Maharashtra has abundance of textile and cotton mills. With so many new small sized mills are coming up, there is a requirement of unsecured business loan helping to build the business ahead. To flourish the business, there is a requirement of huge investment and this is possible when unsecured loan is passed. However, if you are seeking unsecured business loan in Kolhapur then there are multiple factors to consider. 

Credit Score-

For unsecured business loan in Kolhapur, the credit score should be more than 600. This allows lenders to offer loan to entrepreneur with the confidence of getting the money back on time. Also known as CIBIL score it is the pathway to getting timely loan.

Stable Business Income-

If you are already running the small scale textile business, and want to expand it further, then unsecured loan will be helpful. However, it is important to have a stable income to repay the loan amount on a timely basis.

Know Types of Loan-

When you are

Suppose you are in need of an urgent funding to take your business to the next level. When approached for the business loan, the bank or lending institution may ask you to pledge an asset, or contrarily, offer the funds minus any collateral or guarantee. The former   arrangement is called secured business loan while the latter is known as unsecured business loan. Let’s get into the pros and cons of the two for an in-depth understanding. 

Advantages of Secured business loan: 

• A secured business loans guarantees larger funds, depending on the pledged asset. Usually, about 75% of the asset’s value can be availed as a loan. 

• Since the risk of a default is covered by the collateral, the lenders can provide competitive interest rates. 

• The repayment schedule may stretch beyond 5 years, ensuring stress free repayments. 

• Secured loans may be the only option available for people with poor credit score. 

Disadvantages of Secured business loan: 

• In case of non-repayments, you may lose the pledged

There are two concepts of working capital – gross working capital and net working capital. Since companies must have adequate working capital to run and grow their operational functions, they must understand the nature of these different types of working capitals.

Gross Working Capital

Gross working capital is a company’s total amount of current assets, including cash on hand, inventory, accounts receivable and short-term investments. However, liabilities are not part of this calculation; hence gross working capital shows a limited description of a company’s finance. 

Gross Working Capital = Total Current Assets

Net Working Capital

A net working capital is a complete and accurate measure of a company’s liquidity health.  It represents a company’s excess of current assets over its current liabilities. The current assets comprise bank balance, cash, debtors, stock, bills receivables, etc. On the other hand, the current liabilities include things like creditors, bills payables, etc. 

The