Working Capital Facilities · Question

How do I move my working capital limit to another bank?

Short answer

You move a limit through a takeover. Approach the new lender, which appraises your business as if for a fresh sanction, issues a sanction letter, and settles the outstanding with the existing lender once its no-objection and security release steps are complete. Expect the process to take several weeks, with the old account kept running until the switch.

In more detail

Do not close or stop using your existing facility until the new one is firmly in place. Cutting off early can leave payroll and supplier payments unfunded.

The sequence usually runs as follows. You approach the new lender with your latest financials, bank statements, sales tax returns, stock and debtor statements and a summary of existing facilities and security. The new lender appraises the business, checks credit records, values security and may inspect stock or premises. It then issues a sanction letter with its terms, and you should read the fees, security, covenants and any condition about closing the old account.

Next, the existing lender is informed, and you request a statement of outstanding dues and its no-objection or closure terms. Security documents it holds are released only against full settlement. On the agreed date the new lender pays off the old one and fresh security documents are completed. Collections are then redirected to the new account and the old account is closed.

Points to watch:

Prepayment or closure charges on the old facility depend on its terms. Check them before deciding.
Timing: pending cheques, bills in transit and unreleased security documents can slow the switch.
Lenders sometimes respond to a takeover request by revisiting your terms, so a candid conversation with the current lender may be useful.

Run both sides in parallel

Ask for the existing lender's closure statement early, because that is often the slowest document. Keep operations running on the old limit until the new lender confirms the first drawing.

Consider whether you want a sole relationship or a shared arrangement with multiple lenders, since that changes who must consent.

Key points

A move is a takeover: fresh appraisal by the new lender, then settlement of the old facility.
Keep the old limit alive until the new one is operational.
Closure of the old facility depends on its charges, dues statement and release of security.
Read the new sanction letter's fees, covenants and security conditions carefully.
Ask the existing lender for closure details early, as that step often delays the switch.

Who this applies to

Owners unhappy with pricing or service from their current lender.
Businesses whose growth has outgrown the current limit.
Finance heads comparing lenders at renewal time.

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.