How does a good credit score benefit an working capital loan?

A good credit score is a major advantage when applying for a working capital loan in India. Lenders view a high score as proof of responsible financial behaviour and strong repayment discipline.

• With a good credit score—generally 700 or above—you are much more likely to get your working capital loan approved quickly and on favourable terms.
• Lenders feel confident that you will repay on time, so they offer lower starting interest rates, higher loan limits and more flexible repayment options. Approval is often faster because less verification is needed.
• A strong credit score also gives you more negotiating power. You may be able to choose a longer tenure or access a larger line of credit, which can help manage day-to-day business expenses and cash flow gaps. Businesses with high credit scores often enjoy easier renewals and top-up facilities for their working capital loans.
• Maintaining a good credit score requires timely repayments, a healthy credit mix, and careful financial planning. Avoid taking multiple business loans at once, as this can negatively impact your score.