What is business working capital loan?

Business working capital loan is a type of loan which is provided to fund the day to day operations of the business. Most businesses have different cycles of production, sales and payments. This results in a cash flow mismatch. Higher receivables cripple a business of its cash flow and would require continuous working capital funding as the business increases its turnover. Banks and other financial institutions offer working capital loans to such businesses. These loans are typically short term in nature and expected to be repaid as soon as the business gets paid by their customers.