Working Capital Finance
(Corporate Loans Included)
A firm's working capital is the money it has with it to meet current obligations (those due in less than a year) and to acquire earning assets. Tipsons helps corporates in raising Working Capital Finance to meet their operating expenses, purchasing inventory, receivables financing, either by direct funding or by issuing letter of credit and other similar instruments.
- Funded facilities, i.e. the bank provides funding and assistance to actually purchase business assets or to meet business expenses.
- Non-Funded facilities, i.e. the bank can issue letters of credit or can give a guarantee on behalf of the customer to the suppliers, Government Departments for the procurement of goods and services on credit.
- Available in both Indian as well as Foreign currency.
Types of Working Capital Finance
Cash Credit
This is a running account facility that is extended for a short period, not more than 12 months and reviewed regularly. Banks normally lend money against the security of stock and debt. In addition, the borrower only has to pay interest on the amount actually utilized by it. In order to repay and close the account, simply deposit the outstanding dues into the account.
Overdraft Facility
Get access to cash immediately as and when required means the act of overdrawing from a Bank account. In addition, the borrower has to pay only the interest on the amount actually utilized by it. In order to pay, simply deposit the outstanding dues into the account.
Pre-shipment Finance/Packing Credit
Short term, pre-shipment financing enables exporters to procure raw materials for the manufacture of finished goods for export. The facility is available both in Indian Rupee and in major foreign currencies to Exporters, enabling the exporters to compete in global market against others.
Post-Shipment Finance
Short term, post sale financing to the exporter to provide liquidity during the credit period permitted to the overseas buyers to make payment. The facility is available both in Indian Rupee and in major foreign currencies to Exporters, enabling the exporters to compete in global market against others.
Buyers Credit
As an importer, one can avail of Buyers Credit facility at very competitive rates. One can make the import payment to its overseas supplier by availing the buyers credit and can repay the lender at a later date. The funding is arranged from the overseas network branches and one can avail of this product in major currencies. Availing Buyers credit would be subject to compliance with the bank’s internal process and policy requirements.
Short term corporate loans
These will be demand loans of less than or upto 12 months’ tenor availed by borrowers to support temporary cash flow mismatches or to avail short-term interest rate arbitrage.
Long Term corporate loans
These will be demand loans of 12 months to 36 months’ tenor availed by borrowers to support long term augmentation of working capital , procurement of certain assets , cash flow mismatches etc
Bank Guarantee
Local and foreign currency Bank Guarantees issued on the behalf of the borrower against specified collaterals for its business needs.
Letters of credit (L/C)
An L/C is a Banker’s undertaking on behalf of a constituent to pay to a third party against compliance of stipulated conditions. This involves irrevocable sight and Issuance L/Cs, back to back L/Cs, Standby L/Cs & Inland & Foreign L/Cs.
