Working Capital Loans

Manage your liquidity at competitive cost.

A working capital loan is money borrowed to finance the day-to-day operations of the business. This includes the purchase of raw materials, fixed, regular expenses such as rent for the factory shed and office, salaries and wages, office expenses, security costs, etc. A working capital loan is not usually used to buy assets or make investments. However, there are no restrictions on how you use a working capital loan once it is sanctioned for any customer. To make the best use of a working capital loan, read the answers to the frequently asked questions.

Cash Credit starting @ 9.5%

*T&C Apply | Rate of Interest Linked with Repo Rate and subject to changes as per RBI circulars

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Know More about WORKING CAPITAL LOAN

ELIGIBILITY CRITERIA

The following people are eligible to apply for a Working Capital Loan:

~ Individuals, proprietors, partnership firms, private or public companies, retailers, traders or any other business owner engaged in the business of service, manufacturing products, or trading sectors that require constant cashflows to maintain their business’s working capital.
~ The borrower should be a minimum of 21 years of age when applying for the loan and should be no older than 65 years on maturity of the loan.

DOCUMENTS REQUIRED (For Proprietorship Firms)

The following documents are required to apply for a Working Capital Loan:

~ FY23 Provisional financial
~ Last three years Audited financials( FY-22 & FY-21, FY-20) ITR with Computation, Balance sheet, Profit & loss with Schedule, Tax Audit Report -Form 3cb, 3cd.
~ Sanction Letter of all loans along with Schedule & updated loan sheet.
~ Last 12 months bank statements of all banks.
~ Address proof (Telephone bill or electricity bill)-Latest (within 60 days)
~ Udyam registration certificate
~ Trade reference 5 Buyers & Suppliers contact details along with the volumes for last two years and 2 personal references (Friends and relatives)
~ GST Certificate & GST Return since April 22 to till date
~ Profile of the company (History, Product, and Operation)
~ Stock, Debtors & Creditors statement April 22 to till date
~ Month wise sale list April 22 to till date
~ Projections / CMA
~ Valuation & Legal Technical Cheque.
~ Group Company Financial and Sanction letter if any
~ Profile of the Company (History, Products, and Business)
~ Property Papers –
-Sale Deed Including Back Chain.
-Map of Sanction Plan.
-Property Tax Slips

Proprietor & Co-Applicant Documents
~ ITR Return with computation for last 2 Years
~ KYC – PAN Card, Aadhar Card
~ Photographs of each individual

DOCUMENTS REQUIRED (For Partnership Firms)

The following documents are required to apply for a Working Capital Loan:

~ FY-23 Provisional financial
~ Last two year audited financials (FY-22, & FY-21, FY-20) ITR and Computation, Balance sheet, Profit & loss a/c Schedule, Tax Audit Report -Form 3cb, 3cd.
~ Form 26AS If any
~ Sanction Letter of all loans with Schedules
~ Last 12 months bank statements of all banks.
~ Business Incorporation date proof- PAN Card
~ Partnership deed.
~ Udyam registration certificate
~ Address proofs (Telephone bill or electricity bill)-Latest (within 60 days)
~ Trade References 5 Buyers and 5 Suppliers contact details along with the volumes for last two years and 2 personal references (Friends and relatives)
~ GST Certificate & GST Returns since April 22 to Till Date
~ Stock, Debtors & Creditors statement April 22 to till date on company letterhead.
~ Month wise sale list April 22 to till date on company letterhead.
~ Projections /CMA
~ Profile of the company (History, Product, and Business)
~ Group Company financial and Sanction Letter. (If any).
~ Valuation & Legal Technical Cheque.
~ Property Papers – (Front and Back).
-Sale Deed Including
-Map of Sanction Plan.
-Property Tax Chillan.

Partners Individual Documents
~ ITR with computation for the last 2 years.
~ KYC – PAN Card, Aadhar Card
~ Photographs of each individual

DOCUMENTS REQUIRED (For LLP / Private Limited / Limited Firms)

The following documents are required to apply for a Working Capital Loan:

~ FY- 23 Provisional financial
~ Last three years Audited financials (FY-22 & FY-21,FY-20) ITR with Computation, Balance sheet , Profit & loss with schedule, Independent auditors report & Tax Audit Report -Form 3ca, & 3cd.
~ Form 26AS (If Any).
~ Sanction Letter of all loans along with Schedules & updated loan sheet.
~ Last 12 months bank statements of all banks.
~ Business Incorporation date proof- PAN Card
~ MOA (Memorandum of association) and AOA (Articles of Association) + Certificate of Incorporation.
~ Udyam registration certificate
~ Address proof Telephone bill or electricity bill. (Latest within 60 days.)
~ CA certified Net worth statement of Directors and Shareholders.
~ Trade reference 5 Buyers & Suppliers contact details along with the volumes for last two years and 2 personal references (Friends and relatives).
~ Stock, Debtors & Creditors statement April 22 to till date
~ Month wise sale list April 22 to till date
~ Projections /CMA
~ GST Certificate & GST Return from April 22 to Till Date.
~ Profile of Company (History, Product, Business).
~ Valuation & Legal Cheque.
~ Group Company Financials and Sanction Letter.(If any).
~ Property Papers – (Front and Back Xerox).
-Sale Deed Including the last 13 years of Back Chain.
-Map of Sanction Plan.
-Property Tax Slips

Directors Documents
~ ITR Return with computation for last 2 Years.
~ KYC – PAN Card, Aadhar Card.
~ Photographs of each individual

Rack Rate of Interest (ROI)

~ 9.50% to 16% per annum

Processing Fee / Loan Processing Charges

0.5% to 2% one time on the sanctioned loan amount.

The processing fee depends on the credit decision of Financial Institution providing the sanction. At no given point does BazaarMoney / its employees / partners solicit Processing Fee to be paid to our own account. This fee is directly payable to the Financial institution.

Frequently Asked Questions about WORKING CAPITAL LOAN

Types of Working Capital Loan

~ Overdraft Facility or Cash Credit
~ Working Capital Demand Loan / WCTL
~ Bank Guarantee
~ Letter of Credit
~ Packing Credit (Pre and Post Shipment Finance
~ Supply Chain Finance -Accounts Receivable Loan/Invoice Discounting/ PO Finance

What is Cash Credit?

A Cash Credit is a short-term source of financing for a company. In other words, a cash credit is a short-term loan extended to a company by a bank. It enables a company to withdraw money from a bank account without keeping a credit balance.
It is a facility to withdraw money from a bank account without having credit balance but limited to the extent of borrowing limit, which is fixed by the bank.
CC is a very common facility by banks. It is one of the essential short term sources of finance for a business.
The limit calculation depends on the WC GAP

WC GAP = (Stock + Debtor – Creditor)
DRAWING POWER = (Stock + Debtor – Creditor) * 70%

It requires a security be offered up as collateral on the account in exchange for cash. This security can be a Property. The credit limit extended on the cash credit account is normally a percentage of the value of the collateralized security.

What is Overdraft Facility (OD) ?

OD account stands for Overdraft account. It is a type of account in which you can withdraw amount even if there is no fund in your account.
The bank sanctions a specific limit and your account can go in negative up to that limit. The client has to pay interest only on the amount withdrawn as loan.
Since it is a current account, you can make as many transaction as you want. You have to pay interest on the amount which is due by the end of the day.
OD facility is extended to a client wherever there are calculation or WC GAP shortfall. To mitigate the fund requirement, OD facility is extended.
It is an advance given by a bank for day to day expenses against Collateral Security, FD, LIC, NSC, KVP.

What is Bank Guarantee (BG) ?

The bank guarantee means a lending institution ensures that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it. A bank guarantee enables the customer, or debtor, to acquire goods, buy equipment or draw down a loan.

TYPES:
~ Financial Guarantee
~ Performance Guarantee