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Working Capital Finance funds the gap between paying for inventory and being paid by customers. Rather than a single product, it is a set of facilities – cash credit, overdraft, short-term loans and receivable-backed lines – structured around your actual operating cycle.
What this facility gives you.
Matched to your cycle
The structure follows how long your money stays locked in stock and receivables.
Revolving limits
Cash credit and overdraft limits reset as collections come in and can be reused.
Multiple structures
Cash credit, overdraft, bill or invoice discounting and short-term loans, used alone or together.
Who it suits
- Manufacturers and traders holding inventory before it converts to sales
- Businesses selling on credit terms and waiting on receivables
- Firms scaling up order volumes ahead of collections
- Seasonal businesses that build stock ahead of peak demand
Documents usually required
- KYC of applicant and co-applicant
- Business registration and constitution documents
- Last 12 months bank statements of the operating account
- Audited financials, ITRs and GST returns
- Debtor and creditor ageing, and stock statements where applicable
The final checklist depends on the lender, your constitution type and the facility structure.
How Working Capital Finance is typically structured.
Indicative only. Every lender applies its own policy, and your sanctioned terms come from the lender assessing your case.
| Type of facility | Cash Credit, Overdraft, Bill Discounting or short-term loan |
|---|---|
| Security | Hypothecation of stock and book debts; collateral where required |
| Limit assessment | Based on the operating cycle, turnover and stock or debtor levels |
| Review cycle | Typically renewed annually, subject to conduct |
| Assessment basis | Financials, banking conduct and working capital gap |
Frequently asked.
How is a working capital limit assessed?
Lenders look at how much money your business has tied up in stock and receivables at any point, net of the credit your suppliers extend you. That gap, tested against turnover and financials, sets the limit.
Can working capital and a term loan run together?
Yes, and often they should. A term loan funds the asset; the working capital line funds running it. They are assessed separately.
Is collateral required?
Stock and book debts are normally hypothecated to the lender. Whether additional collateral is needed depends on the limit and the profile.
Other loan solutions.
Business Loan
A Business Loan helps you fund expansion, inventory, equipment, hiring or any other legitimate business requirement.
Learn more →Loan Against Property
A Loan Against Property lets you raise funds against a residential, commercial or industrial property you already own, while continuing to use it.
Learn more →Overdraft
An Overdraft gives your business a sanctioned limit it can draw from as needed.
Learn more →Considering Working Capital Finance?
Share a few details and our team will assess your profile and come back with the options it supports.