Working Capital Facilities · Question

What is an ad hoc limit and when do banks allow one?

Short answer

An ad hoc limit is a temporary extra amount a lender allows on top of your sanctioned working capital limit, for a short, specific need such as a seasonal peak or a large one-time order. It is a discretion, not a right. Lenders allow it when the account has been well run and the need and repayment source are clear and short-lived.

In more detail

A regular limit is sized from your assessed requirement for the year. Real life does not always follow the assessment: a bumper order arrives, a festive season comes early, or an input price jumps. An ad hoc limit gives room to cope without re-doing the whole sanction.

Lenders usually look at whether:

the account has run regularly, with clean conduct and no habitual overdrawing;
the reason is specific and temporary, and not a sign of lower profits;
the source of repayment is identifiable, for example a confirmed order or a known collection date;
the extra amount fits within the lender's discretionary powers for that account.

It is typically granted for a short period and priced according to the lender's policy, often higher than the regular limit. It may also need a written request, fresh stock or debtor details and sometimes a simple supporting document such as the order copy.

A garment maker before a festive season

A garment maker must buy fabric and pay stitching charges ahead of an anticipated surge in orders. The normal limit covers regular months but not the peak. After showing confirmed buyer orders and a clean account record, it asks for a temporary addition to cover the build-up, with clear repayment from the buyers' payments.

An ad hoc limit does not replace a permanent increase. If the need keeps coming back, the underlying limit is probably too small and should be reassessed at review.

Ask for the terms in writing: the amount, the end date, the pricing and any fee. Make sure it is cleared by the end date, because an ad hoc amount left unpaid becomes an irregularity.

Key points

An ad hoc limit is temporary extra headroom above the sanctioned limit.
It is discretionary and depends on how well the account has been run.
Lenders want a specific, short-lived need and a clear repayment source.
It may be priced higher and often needs a written request with supporting papers.
Repeated need suggests reassessing the main limit at review.

Who this applies to

Borrowers with a seasonal peak or large one-off order.
Owners who find their sanctioned limit slightly short mid-year.
Finance teams planning for months with unusual funding needs.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority. Lalsar Holdings' financial advisory and financing work is advisory and facilitation only. Lalsar Holdings is not a lender. Sanction and disbursement of any credit facility is at the sole discretion of the partner bank, NBFC, or financial institution involved, subject to their own eligibility criteria and credit policy.