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 @ 8.5%
*T&C Apply | Rate of Interest Linked with Repo Rate and subject to changes as per RBI circulars
Know More about WORKING CAPITAL LOAN
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.
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
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 Account 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 from April 2022 to Till Date
∼ Stock, Debtors & Creditors statement from April 2022 to till date on company letterhead
∼ Month-wise sales list from April 2022 to till date on company letterhead
∼ Projections / CMA
∼ Profile of the company (History, Product, and Business)
∼ Group Company financials and Sanction Letter (if any)
∼ Valuation & Legal Technical Cheque
∼ Property Papers – Front and Back:
– Sale Deed
– Map of Sanction Plan
– Property Tax Challan
Partners Individual Documents
∼ ITR with computation for the last 2 years
∼ KYC – PAN Card, Aadhaar Card
∼ Photographs of each individual
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 Auditor’s 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 references: 5 Buyers & Suppliers contact details along with the volumes for the last two years and 2 personal references (Friends and Relatives)
∼ Stock, Debtors & Creditors statement from April 2022 to till date
∼ Month-wise sale list from April 2022 to till date
∼ Projections / CMA
∼ GST Certificate & GST Returns from April 2022 to Till Date
∼ Profile of the 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 the last 2 years
∼ KYC – PAN Card, Aadhaar Card
∼ Photographs of each individual
8.50% to 12% per annum
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 ARS Capital / 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
∼ Overdraft Facility or Cash Credit
∼ Working Capital Demand Loan (WCDL) / WCTL
∼ Bank Guarantee
∼ Letter of Credit
∼ Packing Credit (Pre and Post Shipment Finance)
∼ Supply Chain Finance – Accounts Receivable Loan / Invoice Discounting / PO Finance
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 a credit balance but limited to the extent of the borrowing limit, which is fixed by the bank.
Cash Credit (CC) is a very common facility provided by banks. It is one of the essential short-term sources of finance for a business.
The limit calculation depends on the Working Capital (WC) GAP.
WC GAP = (Stock + Debtor – Creditor)
DRAWING POWER = (Stock + Debtor – Creditor) × 70%
It requires a security to be offered 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.
OD account stands for Overdraft account. It is a type of account in which you can withdraw an amount even if there are no funds in your account.
The bank sanctions a specific limit, and your account can go into a negative balance up to that limit. The client has to pay interest only on the amount withdrawn as a loan.
Since it is a current account, you can make as many transactions as you want. You have to pay interest on the amount that is due by the end of the day.
OD facility is extended to a client wherever there are calculation or working capital (WC) GAP shortfalls. To mitigate the fund requirement, the OD facility is provided.
It is an advance given by a bank for day-to-day expenses against collateral security like Fixed Deposits (FD), Life Insurance Corporation (LIC) policies, National Savings Certificates (NSC), or Kisan Vikas Patra (KVP).
A Letter of Credit, or a Credit Letter, is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. If the buyer is unable to make the payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. It may be offered as a facility (financial assistance that is essentially a loan).
Due to the nature of international dealings — including factors such as distance, differing laws in each country, and difficulty in knowing each party personally — the use of Letters of Credit has become a very important aspect of international trade.
A 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 of Bank Guarantee:
∼ Financial Guarantee
∼ Performance Guarantee
A Financial Guarantee is an agreement that guarantees a debt will be repaid to a lender by another party if the borrower defaults. Essentially, a third party acting as a guarantor promises to assume responsibility for the debt should the borrower be unable to keep up with payments to the creditor.
Types of Financial Bank Guarantee:
∼ Corporate Financial Guarantee
∼ Individual Financial Guarantee
A Performance Bank Guarantee, also known as a performance bond or contract bond, is a financial guarantee provided to one party in a contract to protect against the failure of the other party to fulfill their obligations.
It is typically issued by a bank or an insurance company to ensure that a contractor or service provider completes the assigned project or job as agreed in the contract.
Unsecured CC up to 5 crore
*T&C Apply | Rate of Interest Linked with Repo Rate and subject to changes as per RBI circulars
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Portfolio Clients we Work with
Get up to 200% of property value
*T&C Apply | Rate of Interest Linked with Repo Rate and subject to changes as per RBI circulars
