Business Loan

Flexi Loan Is the Ideal Way to Meet Your Working Capital Needs


Businesses need funds to meet their business expenses, be it buying raw materials, paying employees or other day-to-day expenses. The funds needed are called working capital. A lack of free-flowing working capital can disrupt the smooth functioning of an organisation, and it may require working capital finance to bridge the gap. Flexi loans offered by financial institutions can help businesses deal with a working capital crunch.

What are working capital loans?

A business may have to borrow funds to cover the working capital needs, known as working capital finance. All business organisations do not have steady revenues or continuous sales throughout the year. On the other hand, expenses like rent, salaries, and utility payments do not pause. 

Working capital loans help a business finance its routine short-term requirements. They are not suitable for asset purchases or long-term investments. 

These operational loans help organisations deal with a financial crunch during a lean period or when the receivables may be delayed due to unforeseen reasons. With the help of these loans, a business can continue its operations without any hindrance.

Working capital loans may be secured, where you may have to offer some collateral. They may be unsecured, where no collateral is required.

What is a Flexi loan?

Flexi loans are one of the most popular working capital finance options. A Flexi loan is essentially an overdraft facility where a limit is sanctioned for a fixed tenor. You can withdraw the amount you want within the approved limit. There is no limit to the number of withdrawals you can make within the sanctioned tenor.

What are the advantages of Flexi loans for working capital finance?

Flexi loans are the perfect solution for your working capital needs. These loans offer the following advantages.

1. They have high pre-approved limits.

You can get a pre-approved limit sanctioned for a Flexi loan based on your credit score. The higher your credit score, the higher the limit. You can use the amount from your approved limit as per your requirements. With a Flexi loan, you are not burdened with funds you do not require, and at the same time, you are not left without funds when you need them.

2. You get flexibility.

Working capital needs can be unpredictable. Sometimes, you may need funds at short notice. Waiting for a loan to get sanctioned can result in missing the business opportunity.

You do not have to worry about this aspect when you use a Flexi loan. You can withdraw the funds whenever the need arise and however much you require.

In other types of loans, you may get a loan sanctioned and not use it or may not use it in its entirety. In such cases, you still have to pay interest on the entire amount. You do not face any such issues with a Flexi loan.

3. The EMI burden is lower.

Your EMIs depend on the amount you borrow, the loan term and the working capital loan interest rate. When you get a loan sanctioned, you pay interest on the entire amount from the day of your loan disbursal. However, in the case of a Flexi loan, you pay interest only on the amount you utilise from your approved limit. This can help you reduce your monthly burden, which can be a huge relief, especially in the lean period when your revenues are already low.

4. You can pay the interest component only.

Another advantage of Flexi loans is that you can pay only the interest component of your loan during the loan term. You can repay the principal at the end of the loan tenure. For a working capital loan, you need to pay the principal and the interest before the tenure. It increases your EMI.

5. Flexi loans are unsecured loans.

Working capital finance is the lifeline of a business. The need for collateral to get a loan can put a spanner in the wheel but not with a Flexi loan. You do not have to give any collateral to get a Flexi-loan, reducing the paperwork. The time taken for loan approval is not dependent on pledging an asset. You can get unsecured loans of any amount provided you meet other eligibility criteria.

6. There are no partial pre-payment charges.

Lenders may charge some penalty if you pre-pay a loan. A Flexi loan is like an overdraft facility; if you have surplus funds, you can pre-pay and adjust your limit without paying anything extra. When in need, you can withdraw the funds again. As a result, your business will benefit, and you can clear your debt fast once your sales increase.

7. There are instant approval loans.

For a business, it is crucial to have access to working capital finance at short notice, if not immediately. You can get approval for a Flexi loan instantly and get funds in your account within 24 hours. Many lenders provide instant approvals and pre-approved loans.

How to get a Flexi loan?

You can fulfil your working capital finance requirements with a Flexi loan. You need to submit the following documents to get a Flexi loan.

  • Your PAN Card, Aadhaar Card, Passport, Driving License, or Voter’s ID Card.
  • Telephone bill, water or electricity bill, or property tax receipt.
  • Property Document
  • Account statement

What are the eligibility criteria for Flexi loans?

  • The age of salaried applicants should be from 21-70 years.
  • They should be employed in government institutions, private sector companies, MNCs or related companies, partnership firms, etc.
  • The age of self-employed applicants should be from 23 years to 70 years. 
  • They should be self-employed professionals like doctors, architects, lawyers, business owners, proprietors, partners, etc.

Check your eligibility before you apply for a Flexi loan.


The right type of working capital finance can ease your day-to-day fund requirements and also help you save costs. Flexi loans offer a convenient way to finance the operational costs of your business.

Piramal Finance offers low working capital loan interest rates and a hassle-free borrowing experience to help your run your business smoothly. Learn more about how you can get business loans now. Piramal Finance provides comprehensive guides and information on personal and business finance. Read more now.