💼 WORKING CAPITAL LOAN

A Working Capital Loan helps businesses manage day-to-day operations such as:

• Purchasing raw materials
• Paying salaries
• Managing cash flow
• Clearing short-term expenses
• Handling seasonal demand

It is not meant for buying land/buildings or long-term assets.

✅ Types of Working Capital Loans

1️⃣ Cash Credit (CC)

• Most common
• Bank sets a limit (example: ₹10 lakh)
• You can withdraw anytime up to the limit
• Interest charged only on the amount used

2️⃣ Overdraft (OD)

• Similar to CC
• Usually against fixed deposits, property, or banking relationship

3️⃣ Term Loan (Short-term)

• Lump-sum loan for 6–24 months
• EMI based repayment

4️⃣ Invoice Financing / Bill Discounting

• Get cash by selling invoices to bank/NBFC
• Helpful for businesses with credit customers

5️⃣ Bank Guarantee / Letter of Credit (LC)

• For trade, imports, supplies, tenders
• Bank guarantees payment on your behalf

📌 Eligibility

• Business registration (GST, UDYAM, partnership deed, etc.)
• Minimum 1 year of business operations (some lenders allow 6 months)
• Turnover proof
• Income Tax Returns
• Bank statement analysis
• Good CIBIL score (650+)

💰 Loan Amount

Usually depends on:

• Turnover
• Stock + receivables
• Banking history
• Collateral availability

Can range from ₹1 lakh to ₹5 crore+.

💸 Interest Rates

• Banks: 9% – 14%
• NBFCs: 12% – 24%
  Depends on business profile, turnover, and CIBIL score.

📝 Documents Required

✔ Individual / Proprietor

• PAN + Aadhaar
• Address proof
• 6–12 months bank statement
• ITRs for 2 years

✔ Business

• GST returns
• UDYAM/MSME certificate
• Balance sheet + P&L
• Partnership deed / MOA / AOA if applicable
• Stock & debtor statements

⭐ Advantages

• Improves cash flow
• Flexible usage
• Helps in managing seasonal or urgent needs
• Interest only on amount used (in CC/OD)