Working Capital Loan — CC/OD Limits & Eligibility

Inventory in a warehouse, funded by a working capital facility

Who it suits

Working Capital, in one paragraph.

A business whose money is tied up between paying suppliers and collecting from customers. Receivables at 60 days against payables at 30 leaves a permanent hole that a term loan cannot sensibly fill. A revolving limit does, and costs nothing when unused.

Manufacturers and traders carrying inventory through a season.
Businesses selling on credit to larger counterparties.
Anyone whose cash-flow gap reopens every cycle rather than once.
Requires disciplined reporting — stock and debtor statements are periodic.

Key parameters

The numbers that shape the offer.

9–18% Indicative rate p.a., charged on utilisation

20–25% Of annual turnover, a common sizing rule

12 months Typical limit, renewed annually

Indicative only, sourced from public lender information as of July 2026. Your actual rate, tenure and sanctioned amount are set by the lender based on your profile.

Eligibility & documents

What you need before you apply.

Most rejections at this stage are paperwork failures, not credit failures.

Eligibility criteria

Business vintage of 2–3 years with filed financials.
Demonstrable operating cycle — debtor and creditor ageing data.
Current ratio and turnover consistent with the limit requested.
Promoter bureau score of 700+.
Security is usually a charge on stock and book debts, sometimes property.

Documents required

Constitution and KYC documents for the entity and promoters.
2–3 years of audited financials and ITRs.
12 months of current-account statements and GST returns.
Stock statement and debtor / creditor ageing schedules.
Projected turnover and working-capital assessment for the coming year.
Existing sanction letters for any facility already in place.

EMI calculator

See the monthly number before you commit.

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Loan amount ₹

₹1 lakh to ₹5 crore

Rate of interest (p.a.) %

8% to 24%. Charged on the drawn balance, not the limit

Loan tenure Yr

1 to 7 years

Monthly EMI ₹0

Principal: ₹0
Total interest: ₹0
Total payable: ₹0

Indicative only, on a reducing-balance basis. Excludes processing fees, insurance and statutory charges. KredExperts does not set rates; final terms come from the lender.

Working Capital FAQs

The questions that come up first.

What is the difference between cash credit and an overdraft?

Cash credit is secured against current assets — stock and receivables — and the drawing power moves with the value of that security. An overdraft is generally against a fixed limit and may be secured by property or a deposit. Both revolve; the sizing mechanism differs.

How is my limit decided?

Most commonly by an assessment of the operating cycle: what you must fund between paying suppliers and collecting from customers. A frequent shorthand is roughly 20–25% of projected annual turnover, but the underlying assessment is the ageing data, not the rule of thumb.

Do I pay interest on the full sanctioned limit?

No — only on the amount actually drawn, calculated daily. That is the whole point of the instrument. Some lenders levy a small commitment charge on persistent under-utilisation, so a limit far larger than you need is not free.

Is the limit permanent?

No. It is typically sanctioned for 12 months and renewed annually against fresh financials and stock statements. A renewal is not automatic — deteriorating ratios can shrink the limit or attach new conditions.

Can I use a working capital limit to buy machinery?

You should not. It starves the operating cycle it was sized for, and lenders monitor end use through stock statements and account conduct. A machinery loan or term loan matches the asset's life to the repayment schedule.

Line of Credit Business Term Loan All business loans All FAQs

A limit that breathes with the operating cycle.