WORKING CAPITAL LIMITS

  • Working Capital Or The Measure of a Company's Ability To Pay Off its Short Term Debt Is The Difference Between Current Assets And Current Liabilities.

  • A working capital loan is a loan that has the purpose of financing the everyday operations of a company - to cover accounts payable, wages, financing inventories, managing internal cash flows, supporting supply chains, funding production and marketing operations, providing cash support to business expansion and carrying current assets. etc. Companies that have high seasonality or cyclical sales cycles usually rely on working capital loans to help with periods of reduced business activity.

Cash Credit

Cash Credit is a facility to withdraw the amount from the business account even though the account may not have enough credit balance. The limit of the amount that can be withdrawn is sanctioned by the bank based on the business cycle of the client and the working capital gap and the drawing power of the client. This drawing power is determined, based on the stock and book debts statements submitted by the borrower at monthly intervals against the security by hypothecating of stock of commodities and/ or book debts.