What is Working Capital Loan?

It finances day-to-day business needs like raw material, salaries, GST payments, and receivables.

Types of Working Capital Facilities

• Cash Credit (CC) – Limit based, interest on usage
• Overdraft (OD) – Linked to account balance

Who Needs It Most?

• Trading businesses
• Manufacturing units
• Seasonal businesses
• High receivable cycle industries
  
  

How Banks Calculate Limit?

• Turnover method
• Operating cycle method
• Inventory & receivable assessment

Common Reasons for Rejection

• Poor stock records
• Mismatch in GST & books
• Irregular bank operations
• Low profit margins

CA’s Advisory Tip

Clean books + GST compliance = higher working capital limits.