Working Capital Facilities · Question

Can a service business with no stock get a working capital facility?

Short answer

Yes, it can be possible. A service business has no stock to hold as security, so a lender looks instead at receivables from creditworthy clients, the regularity of cash inflows, the promoters' track record and any additional collateral offered. Approval is never certain, and the structure often differs from a classic limit built on stock and debtors.

In more detail

The central worry for a lender is simple: with no goods to take control of, what supports repayment? For services, the answer is the stream of invoices and the quality of the people who pay them.

Banks and NBFCs commonly consider a few routes. A limit linked to receivables lets you draw against invoices raised on established clients. An overdraft against other security, such as property or deposits, is another route. Some lenders offer a term loan sized to cash flows, repaid in instalments, when the business has stable contracts.

What the lender examines:

Client quality: large, regular payers weigh more than a single dependent customer.
Contract evidence: engagement letters, rate cards and renewal history.
Bank statements: whether collections reach the account steadily.
Billing discipline: how long invoices remain unpaid.
Promoters' own financial conduct and credit history.

A design agency with long client payments

A design agency bills corporate clients on completion and is paid after a long approval cycle. Payroll falls due long before the cash arrives. Its lender may agree to fund against accepted invoices from named clients, and may ask for the promoters' personal property as additional security because the agency owns almost no tangible assets.

Be prepared for stricter monitoring of receivables, a smaller initial limit, and a request for collateral. Keep client invoices, acknowledgements and tax filings tidy, since they stand in for the stock statement a trading business would submit. Concentration in one client is the commonest reason a service proposal is trimmed.

Key points

Without stock, lenders rely on receivables, cash-flow regularity and promoter standing.
Invoice-linked limits, overdrafts against other security and cash-flow term loans are common structures.
Client quality and contract evidence matter more than the headline turnover.
Dependence on one client usually reduces what a lender is willing to extend.
Expect extra collateral and closer receivable monitoring.

Who this applies to

Consultancies, agencies, IT and staffing firms billing on credit.
Professional practices with payroll before collections.
Promoters of asset-light companies approaching a lender for the first 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.