Working Capital Loans

What is a working capital loan ?

A working capital loan is a loan availed to fund the daily operations of a business including regular bills that need to be paid, cash flow requirements, employee salaries, and other everyday costs. A working capital loan makes short-term cash available to fulfil a business’s short-term operational needs. The businesses with high seasonality or cyclical sales cycles rely on working capital loans to help them with periods of reduced business activity.

 Many times the business does not have adequate liquid funds to cover the operational expenses. Working capital loans are corporate debt borrowings used to finance the day-to-day expenses.

 For instance, many manufacturing units struggle during the fourth quarter to pay for their operational expenses as this is the lean business period and there is a shortage of short-term cash flows. A working capital loan comes in handy during such situations.

This product is highly flexible and dynamic to suit the unique cash flow patterns of your business. It offers the following features:

  • No pre-payment penalty
  • Interest payable only on the utilized amount
  • Up to 100% LTV against Security/ Collateral provided
  • Loan tenure of up to 1 year, with a provision for renewal
  • Low and attractive rate of interest

Eligibility & Documents Required


When applying for a working capital loan, make sure you meet the eligibility requirements below:

  • You must be at least 25 years old and less than 65 years
  • Your business must be profitable for 3 consecutive financial years
  • Your turnover needs to show an upward trend
  • Your balance sheet must be audited by a registered chartered accountant

Also, make sure that you have all the relevant supporting documents listed below before you apply.

  • Know Your Customer (KYC) Documents – Address, Age & Nationality proofs like Passport, Aadhaar, PAN card and other documents of the Directors or Partners.
  • Proof of Business (ITR/Trade License/Establishment/Sales Tax Certificate)
  • Sole Proprietorship Declaration or certified copy of Partnership Deed
  • Certified true copy of Memorandum and Articles of Association
  • Bank statements for last 6 months
  • Income Tax Returns along with computation for last 3 years
  • Audited Financials for Last 2 years
  • Qualification Documents – Like degrees of graduation & higher education


1. Typically, how is working capital finance structured?
Working Capital loans are tailored to suit the requirements of our clients, and offer various instruments individually or in combination with other products to best suit customer needs.
2. For what tenors does bank extend working capital finance?
Depending upon various facilities working capital finance is extended for tenors up to one year.
3. How long does it take to get the loan?
It takes 10-15 working days to process the loan provided everything is in order.
4. What can be accepted as security/ collateral?
A wide range of securities are accepted. The includes properties such as land & real estate; equipment such as plant & machinery; Fixed Deposits, Deposit Certificates, Kisan Vikas Patra, National Savings Certificates, securities issued by Central and State Governments, gold and other cash equivalents; life insurance policies; and others. Please note the applicability of the above depends upon the overall assessment of the borrower.
5. How much loan can I avail? How is the amount decided?
The maximum eligible loan amount is decided based on your requirement, credit assessment, industry outlook, past performance and expected future cash flows.

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#103, Plot No 28, Mohammed’s Castle, Madhura Nagar, Beside Allahabad Bank, Yousufguda Road, Hyderabad-500 0038.


+91 9347325897


+91 9347325897

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