Working Capital

Cash Credit/Overdraft

“A working capital loan is a loan that is taken to finance the everyday operations of a company. Working capital loans are not used to buy long-term assets or investments and are, instead, used to cover accounts payable, wages, etc.

Working capital is the cash available to finance a company’s short-term operational needs. However, sometimes a company does not have the adequate cash on hand or asset liquidity to cover daily operational expenses and, thus, will secure a loan for this purpose.

It is allowed against hypothecation/pledge/charge on stocks and book-debts. Borrower can utilise the limit as per his requirement and interest is charged only on the outstanding balance. Facility requires to be renewed on annual basis.

Export Finance - Working capital finance extended by way of pre-shipment and post shipment credit.

  • Pre-shipment – Export Packing Credit Advance is granted by the banks to an exporter for financing the purchase, processing, manufacturing and packing of the goods prior to shipment. It can be advanced either in Indian Rupees or in Foreign Currency.
  • Post shipment Export finance is advanced by way of Foreign Bills Purchased/Discounted/ or by Negotiation of Foreign Bills drawn under LC. Bills drawn covering the export consignment will be purchased/ discounted or negotiated and client will get immediate funds which can be recycled in the business.

With a view to encourage exports, both pre-shipment and post-shipment credits are extended at a cheaper rate of interest.

Letter of Credit - To facilitate import/ purchase of goods on credit LC limit is granted by the banks.

Under this facility client can acquire required raw material by establishing LC instead of parting funds upfront.

Payment will be made to the supplier of goods against submission of documents as per terms & conditions specified in the LC.