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Working Capital



About Working Capital Loans

A Working Capital Loan, Cash Credit (CC), Overdraft (OD) is a loan availed to satisfy the everyday functioning of a business as well as to fill the short term gap between accounts receivable from customers & accounts payable to vendors. This gap or time period between payment receivable from customers & payment given to suppliers is called as a working capital gap. Lower the gap, better is the financial health of the business. Working capital loans are also availed by business to cater to seasonal variations in sales like picking up sales in festival time.


Working capital loans (CC/OD limits) are some of the best options available for every businesses. These loans are available with hassle-free processing and quick disbursement of loan. To get the best rate from the finance company, contact us now!

Types of Working Capital Loans

Cash Credit/Bank Overdraft

These are the most usable forms of working capital financing that are mainly used by both small and large businesses. These cash facilities are provided by the commercial banks by which the borrower is approved a specific amount of cash that they can use for making business payments.

Trade Credit

This is a type of working capital financing that is extended by the present or potential supplier of a business. Trade credit is offered to businesses based on their creditworthiness, which is revealed by its profit records, liquidity situation and payment records.

Purchase/Discount of Bills

For a small business, it is another good type of working capital financing provided by the commercial banks. Every business generates bills in their normal routine while selling products or services to debtors.

Working Capital Loans

Working capital loans are used by small businesses to finance their day by day operations or raise their cash flow. Working capital loans are as good as term loans for a short duration.


Running of any business involves a chain of activities right from production to sales and receipts in broad terms. There is a requirement of cash for running all these activities. Ideally, the receipts from sales should finance the next round of production and its associated activities. But in real world, a business concern may end up giving credit to its customer, and may not have time to wait for receipts, etc. Therefore, a business needs cash for running its day-to-day activities which could include payment of salaries, rent, monthly interest payments on debt availed, cost incurred in storing finished good, purchase of raw materials and many more. Working Capital loans are aimed at helping businesses meet this requirement of cash. These loans could be secured or unsecure.

According to the business need, working capital loans may come in various forms like:

  1. Trade Credit
  2. Cash Credit
  3. Letter of Credit
  4. Bank Guarantee