Working capital loans are short-term financing options provided to businesses to cover day-to-day operational expenses, such as payroll, inventory, and utilities. These loans ensure smooth business operations by addressing immediate financial needs and cash flow gaps. Lenders evaluate a company’s current assets and liabilities to determine eligibility, often offering unsecured loans or lines of credit with repayment terms usually ranging from a few months to a year. They are used to bridge temporary financial gaps and maintain a healthy cash flow for business continuity.