{"id":12980,"date":"2020-11-20T06:55:28","date_gmt":"2020-11-20T06:55:28","guid":{"rendered":"\/blog\/?p=12980"},"modified":"2020-11-20T06:56:06","modified_gmt":"2020-11-20T06:56:06","slug":"what-is-the-difference-between-term-loan-and-working-capital-loan","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/","title":{"rendered":"What is the Difference between Term Loan and Working Capital Loan?"},"content":{"rendered":"\n<p>Cost control is vital for successful\nbusiness operations. However, occasional financial crunches can disrupt capital\nflow and handicap business development. Faced with such capital shortfalls,\ncompanies can meet the cash crunch with specialised finance options.<\/p>\n\n\n\n<p>Term loans and working capital loans are\ntwo of the most popular financial aids available to enterprises in India. To\nsecure a favourable finance option, companies can choose a suitable loan term\nbased on cash flow and liquidity needs, in addition to their financial health. <\/p>\n\n\n\n<p>Here is a closer look\nat the primary difference between term loan and working capital loan.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Term loans<\/strong><\/h2>\n\n\n\n<p>Also known as a business term loan, a <a href=\"https:\/\/tata-blog.osian.dev\/corporate\/term-loans.html\">term loan<\/a> is typically a business loan with a repayment tenure between one to ten years. A popular finance choice amongst Indian enterprises, term loans are usually taken to fund capital expenses; including business expansion, acquisitions, new asset purchase, expensive machinery, and more. <\/p>\n\n\n\n<p>Furthermore, a business term loanis a secured loan, which is available\nfor diverse terms such as short-term, long-term, and medium-term. <\/p>\n\n\n\n<p>Key features of the loan include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Repayment tenures are usually longer<\/li><li>Higher loan amount<\/li><li>Interest rates are lower<\/li><li>Multiple EMIs<\/li><li>Collateral is mandatory<\/li><li>Loan disbursement takes time<\/li><li>Involves complex paperwork<\/li><\/ul>\n\n\n\n<p style=\"color:red\"><strong>Additional Read:<\/strong> <a href=\"https:\/\/tata-blog.osian.dev\/blog\/wealth-management\/benefits-of-a-term-loan\/\">Top Benefits of a Term Loan in India<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Working capital loans<\/strong><\/h2>\n\n\n\n<p>A <a href=\"https:\/\/tata-blog.osian.dev\/corporate\/working-capital-finance.html\">working\ncapital loan<\/a> is typically a short-term loan with a repayment tenure\nanywhere between three months to fourteen months. This type of loan is mainly\ntaken to meet the costs of running a business \u2013 be it routine operational\nexpenses or insufficient working capital. Companies can take a working capital\nloanto pay staff salaries, monthly\nrent, and other day-to-day expenses. <\/p>\n\n\n\n<p>Furthermore, since the criterion for the\nloan is timely repayment, businesses can secure working capital loans as many\ntimes as needed. Based on specific cash flow needs, companies can avail of an\nappropriate loan amount.<\/p>\n\n\n\n<p>Key features of the loan include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Repayment tenures are shorter<\/li><li>Smaller loan amount<\/li><li>Interest rates are higher<\/li><li>Limited EMIs<\/li><li>Collateral may or may not be mandatory<\/li><li>Loan disbursement is quicker<\/li><li>The loan process is simpler<\/li><\/ul>\n\n\n\n<p style=\"color:red\"><strong>Additional Read:<\/strong> <a href=\"https:\/\/tata-blog.osian.dev\/blog\/wealth-management\/documents-required-to-get-a-working-capital-finance\/\">Documents\nRequired to Get a Working Capital Finance<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Which finance option is better?<\/strong><\/h2>\n\n\n\n<p>Both types of loans offer lucrative\nfeatures and terms essential to keep the business operations optimal. Of the\ntwo finance options, business term loans are usually better choices for\ninvestment heavy ventures. But if the company only requires small amounts to\nmeet the operational expense, working capital loans are ideal. <\/p>\n\n\n\n<p>Moreover, timely repayment on term loans\ncan improve the business credit significantly, since the loan amount is\ntypically higher. But working capital loans do not offer such credit score\nimprovements. In any case, the choice of finance will depend primarily on the\nnature of the capital need. <\/p>\n\n\n\n<p>Are you thinking of buying a crucial asset?\nLet Tata Capital finance your next capital venture. Get a lucrative business\nloan customised to the unique needs of your business and enjoy favourable\nrepayment tenures. Besides, our documentation process is quick and easy for\nfaster loan disbursal. For further information, contact us today. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cost control is vital for successful business operations. However, occasional financial crunches can disrupt capital flow and handicap business development. <\/p>\n<p><a href=\"https:\/\/tata-blog.osian.dev\/blog\/term-loans\/what-is-the-difference-between-term-loan-and-working-capital-loan\/\">Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":12981,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[56],"tags":[],"class_list":["post-12980","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-term-loan"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.13 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Working Capital vs. Term Loan \u2013 All You Need to Know - Tata Capital Blog<\/title>\n<meta name=\"description\" content=\"Before choosing the right source of capital for your business, it is important that you know the\u00a0difference between\u00a0term loans and working capital. Get details!\" \/>\n<meta name=\"robots\" content=\"noindex, nofollow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Working Capital vs. Term Loan \u2013 All You Need to Know - Tata Capital Blog\" \/>\n<meta property=\"og:description\" content=\"Before choosing the right source of capital for your business, it is important that you know the\u00a0difference between\u00a0term loans and working capital. Get details!\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/\" \/>\n<meta property=\"og:site_name\" content=\"TATA Capital Blog\" \/>\n<meta property=\"article:published_time\" content=\"2020-11-20T06:55:28+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-11-20T06:56:06+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/11\/difference-between-term-loan-and-working-capital-loan.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"770\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Tata Capital\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Tata Capital\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/\",\"name\":\"Working Capital vs. Term Loan \u2013 All You Need to Know - Tata Capital Blog\",\"isPartOf\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#website\"},\"datePublished\":\"2020-11-20T06:55:28+00:00\",\"dateModified\":\"2020-11-20T06:56:06+00:00\",\"author\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/5ccf99347b9365e2fa68bd32006d0b4a\"},\"description\":\"Before choosing the right source of capital for your business, it is important that you know the\u00a0difference between\u00a0term loans and working capital. Get details!\",\"breadcrumb\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.tatacapital.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"What is the Difference between Term Loan and Working Capital Loan?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#website\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/\",\"name\":\"TATA Capital Blog\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.tatacapital.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/5ccf99347b9365e2fa68bd32006d0b4a\",\"name\":\"Tata Capital\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g\",\"caption\":\"Tata Capital\"},\"sameAs\":[\"https:\/\/tata-blog.osian.dev\/blog\"],\"url\":\"https:\/\/tata-blog.osian.dev\/blog\/author\/admin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Working Capital vs. Term Loan \u2013 All You Need to Know - Tata Capital Blog","description":"Before choosing the right source of capital for your business, it is important that you know the\u00a0difference between\u00a0term loans and working capital. Get details!","robots":{"index":"noindex","follow":"nofollow"},"og_locale":"en_US","og_type":"article","og_title":"Working Capital vs. Term Loan \u2013 All You Need to Know - Tata Capital Blog","og_description":"Before choosing the right source of capital for your business, it is important that you know the\u00a0difference between\u00a0term loans and working capital. Get details!","og_url":"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/","og_site_name":"TATA Capital Blog","article_published_time":"2020-11-20T06:55:28+00:00","article_modified_time":"2020-11-20T06:56:06+00:00","og_image":[{"width":770,"height":400,"url":"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/11\/difference-between-term-loan-and-working-capital-loan.jpeg","type":"image\/jpeg"}],"author":"Tata Capital","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Tata Capital","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/","url":"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/","name":"Working Capital vs. Term Loan \u2013 All You Need to Know - Tata Capital Blog","isPartOf":{"@id":"https:\/\/www.tatacapital.com\/blog\/#website"},"datePublished":"2020-11-20T06:55:28+00:00","dateModified":"2020-11-20T06:56:06+00:00","author":{"@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/5ccf99347b9365e2fa68bd32006d0b4a"},"description":"Before choosing the right source of capital for your business, it is important that you know the\u00a0difference between\u00a0term loans and working capital. Get details!","breadcrumb":{"@id":"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.tatacapital.com\/blog\/term-loan\/what-is-the-difference-between-term-loan-and-working-capital-loan\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.tatacapital.com\/blog\/"},{"@type":"ListItem","position":2,"name":"What is the Difference between Term Loan and Working Capital Loan?"}]},{"@type":"WebSite","@id":"https:\/\/www.tatacapital.com\/blog\/#website","url":"https:\/\/www.tatacapital.com\/blog\/","name":"TATA Capital Blog","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.tatacapital.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/5ccf99347b9365e2fa68bd32006d0b4a","name":"Tata Capital","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g","caption":"Tata Capital"},"sameAs":["https:\/\/tata-blog.osian.dev\/blog"],"url":"https:\/\/tata-blog.osian.dev\/blog\/author\/admin\/"}]}},"featured_image_url":"https:\/\/tata-blog.osian.dev\/blog\/wp-content\/uploads\/2020\/11\/difference-between-term-loan-and-working-capital-loan.jpeg","_links":{"self":[{"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/posts\/12980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/comments?post=12980"}],"version-history":[{"count":2,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/posts\/12980\/revisions"}],"predecessor-version":[{"id":12983,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/posts\/12980\/revisions\/12983"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/media\/12981"}],"wp:attachment":[{"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/media?parent=12980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/categories?post=12980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/blog\/wp-json\/wp\/v2\/tags?post=12980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}