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Working capital management is critical to a company's core financial health as well as its operational performance. Working capital is calculated as (current assets - current liabilities). Working capital finance is a critical indicator that determines how well a business is being run and how financially secure it is. The working capital ratio, which is calculated by dividing current assets by current liabilities, determines whether a company has enough cash flow to pay off short-term debts and expenses.
Why is Working Capital Important for Transportation, Logistics & Warehousing Businesses?
This buildup becomes a heavy load that casts a pall over net profit and begins to eat away at it. If the problem is not fixed, the transportation business will be unable to operate and will be compelled to park its equipment until a financial solution is found. Clients will have found other carriers to meet the service responsibilities that your trucking firm failed to meet by this time. A loan taken for working capital for MSME beforehand can help deal with short-term cash flows.
A loan taken for working capital for MSME can be just the contingency you need in case of cancellations of orders as the environment currently is highly volatile.
A hassle-free, tailor-made, personalised service guaranteed working capital loan from Kotak Mahindra Bank can come in handy for your transportation, logistics and warehousing business in many different ways. Hike in fuel bills, maintenance of transport, contingency, positive cash flows during slumps or expansion plans are many different reasons for a working capital loan to give you that financial push towards success. Before applying for a loan, check your eligibility to meet the criteria for a loan. There are many financial solutions tailor-made for your business, so you must do your research before applying for one.
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