Working Capital FAQs

A loan granted to cover the short term working capital gap of the company/firm. It is used for daily operational expenditure also, i.e. any expenses related to the purchase/production of goods/services.

It is basically granted to bridge the time gap between production/purchase and sale of goods of a firm/company.

Cash credit, WCDL, LCs are granted for a period of 12 months and renewed year on year.

In case of Term loans, it is generally for a tenor of 5 years.

It is granted against a primary security of stocks and book debts.

Generally secured by collateral of residential/commercial/industrial property or a combination of the above.

The types of working capital facilities include

Cash Credit

Term Loan

Working Capital Term loan/Demand loan

LCs- import and inland

Bank Guarantees

Indicative interest rate varies between 11.5% p.a. - 15% p.a.(depending on various parameters as specified by the bank/FI)

To be eligible for a working capital loan, the company should be in existence for a minimum period of 2/3 financial years, with a positive bottom line.

However, startups with a strong concept and sufficient collateral backing with supporting cash flows can avail of this facility.

All types of constitution, be it, proprietorship, partnership, private/public limited companies are eligible.

Please Click here to check for the documents needed for availing this facility.

Click here for checking your loan eligibility.

Yes, a balance transfer is possbile to take advantages of lower rates of interest or for other reasons