What is Working capital Loans??
Understanding Working Capital Loans, A Lifeline for daily business needs is designed to help businesses manage their day-to-day operational expenses. Rather than being used for purchasing long term assets or making investments, this type of financing ensures that a company can meet its short term obligations such as rent, salaries, utilities, and interest payments. These business capital loans act as a financial cushion that helps businesses maintain smooth operations, especially during cash flow gaps or slow revenue periods. Companies that operate in seasonal or cyclical industries often rely on working capital loans during off peak times to stay afloat until business picks up again.
Key Highlights:
- A working capital loan helps businesses fund their routine expenses and operational costs.
- It is not intended for long-term asset purchases or investments.
- Businesses with fluctuating revenue due to seasonal trends or cycles commonly use these loans.
- These loans may be tied to the owner’s personal credit, and missed payments can impact their credit score.
- PAN Card of the Business and Proprietor/Partners/Directors
- Aadhaar Card of the Business owners
- Business Address Proof – electricity bill, rent agreement, or property documents
- Business Registration Proof – GST certificate, Shop Act license, Udyam Registration, etc.
- Bank Statements – last 6 to 12 months
- Income Tax Returns (ITR) – last 1 to 2 years (if applicable)
- Financial Statements – balance sheet, profit & loss (for higher loan amounts)
- Existing Loan Statements – if you have any current loans
- Partnership Deed or MOA/AOA
(For Partnerships or Companies) - Trade License or Other Industry Specific Licenses
Types of Working Capital Financing
- Term Loans: Lump sum with a fixed repayment schedule.
- Business Line of Credit: Revolving credit you can draw from as needed.
- Invoice Financing (Receivables Financing): Borrowing against unpaid invoices.
- Business Credit Cards: Flexible, short-term option with potential rewards.
SME & MSME LOANS
Annual Turnover Requirement: ₹60 lakhs to ₹7.5 crores. Applications with turnover above ₹7.5 crores may be considered only if the customer qualifies under Priority Sector Lending (MSME category).
Features & Benefits of Our Working Capital Loan
Dedicated Relationship Manager: Get quick help with any queries through a single phone call.
Anywhere, Anytime Banking: Access services online through our secure digital platform.
Competitive Interest Rates: Get funding at rates that make sense for your business.
Customized Loan Options: Choose from fund-based and non-fund-based facilities as per your needs.
Quick Processing & Easy Documentation: Hassle-free process to save you time.
Flexible Collateral Options: Multiple types of collateral accepted to support your loan.
Loan Transfer Facility: Shift your existing loan from another bank and enjoy better terms.
Fully Digital Application & Services: From application to post-disbursement, everything is online.
Special Overdraft for Retailers & Shopkeepers: Tailored solutions for kirana stores and small retail businesses.
Loan Programs Based on GST Returns: Customized loan offers based on your GST filings.
Collateral-Free Loans up to ₹5 Crores: Available under the CGTMSE scheme for manufacturing, service, and trade businesses (Terms apply).
Fund & Non-Fund Based Facilities for Your Business
Get access to a wide range of financial services tailored to support your business growth:
Fund-Based Facilities:
• Cash Credit – Working capital for day-to-day business needs
• Overdraft Facility – Options include:
o Overdraft Against Property
o Dropline Overdraft (DOD)
o Term Loan
• CGTMSE Loans – Collateral-free credit under the Credit Guarantee Trust for Micro & Small Enterprises
• Export Packing Credit (EPC) – Pre-shipment finance for exporters
• Pre-Shipment Finance (PSF) – Funds to process and pack export orders
• Bill Discounting – Get immediate funds by discounting invoices or bills
• DRUL – Drawing power based loans (for businesses with receivables)
• Letter of Credit (LC) – Ensures payment to suppliers, especially for imports/exports
• Bank Guarantee (BG) – Financial assurance for performance, security, or payment obligations
Eligible Business Types
- Sole Proprietorship
- Partnership Firm
- Limited Liability Partnership (LLP)
- Private and Public Limited Companies
Eligibility Criteria
- Minimum Business Vintage: The business should be operational for at least 3 years.
- Profit Track Record: The business must have been Profitable for the last 2 years.
- Collateral Requirement: Must have collateral such as residential, commercial, or industrial property, fixed deposits, or other liquid securities.
Customer Segment
- Manufacturers
- Distributors
- Retailers
- Traders
- Service Providers
Documentation:
Identity Proof & Address Proof:
- Aadhaar Card
- Passport
- PAN Card
- Voter ID
- Driving License
Proof of Business:
- Business Registration Certificate (e.g., Udyam, GST)
- Partnership Deed (if applicable)
- Certificate of Incorporation
- Shops & Establishment Certificate
- Articles of Association / Memorandum
Company Financials (last 3 years):
- Audited/Provisional Balance Sheet
- Profit & Loss Statements
- Tax Audit Reports
- VAT/GST Returns
- Bank Statements: Last 6 month’s bank statements of the business account
Loan Facilities Available
- Dropline Overdraft
- Cash Credit
- Term Loan Or a combination of the above, based on customer needs
Loan Amount:
- Minimum: Above ₹10 Lakhs
- Maximum: ₹50 Lakhs
Repayment Terms:
- Cash Credit:
- Must be renewed every 2 years
- Annual performance review required
- Term Loan / Dropline Overdraft:
- Maximum Tenure: 7 years (including up to 6 months moratorium)
- Annual review for all loan types.
Frequently Asked Questions...
How fast can I get a working capital loan?
Funds can be disbursed in as little as 1-3 business days, depending on the lender.
Do I need collateral for a working capital loan?
Many are unsecured, but some lenders may require collateral or a personal guarantee.
Are working capital loans different from term loans?
Yes, they’re shorter-term and designed for immediate cash flow needs, not longterm investments.
