Loading...
Questions
Questions about Working Capital Facilities
Plain answers to common questions on this service, grouped by what you are trying to find out. Each answer starts with the direct reply.
Basics
- What is the working capital cycle and why do lenders care about it?Understand how cash moves from raw material to customer payment, and why lenders size your limit around the length of that loop.
- What is an ad hoc limit and when do banks allow one?Learn what an ad hoc limit is, the situations in which lenders sanction one, and the conditions that usually come with this temporary extra headroom.
Eligibility & documents
- What documents does a bank ask for when sanctioning a working capital limit?A category-wise list of the papers lenders usually collect before sanctioning a working capital limit, so a first-time applicant can gather them calmly.
- Can a service business with no stock get a working capital facility?How consultancies and agencies with no inventory can get working capital, and what lenders rely on when there is only receivables to look at.
- Can I use my cash credit limit to repay a term loan instalment?Why lenders object to funding a term loan instalment from a cash credit limit, what end-use rules mean, and cleaner ways to handle a cash shortfall.
- Is it possible to get working capital finance against a purchase order?See when a lender will fund material and labour against a confirmed purchase order, what it examines in the buyer and order, and what risks remain.
Process
- How can I shorten my cash conversion cycle without hurting sales?Practical levers on collections, stock and supplier terms that release trapped cash while keeping customers happy and shelves full.
- How do I move my working capital limit to another bank?A general walkthrough of how a takeover of your working capital limit by another lender works, from approaching the new bank to closing the old account.
Choosing & comparing
- What is the difference between a working capital demand loan and cash credit?Compare a fixed-amount working capital demand loan with a running cash credit limit, so you know which one suits steady needs and which suits swings.
- Should I take a working capital loan or negotiate longer credit from suppliers?Weigh interest-bearing bank funding against longer supplier payment terms, including the hidden costs and relationship risks on each side.
- What is the difference between bill discounting and invoice factoring?Compare bill discounting, where you stay responsible for collection, with factoring, where a provider manages collection, to choose receivables finance wisely.
Share a few details about your situation and our team will follow up.
Read about Working Capital Facilities