Loan product
Working Capital & CGTMSE Limits
Bridge your liquidity gap and pay interest only on what is being utilised, also Govt backed unsecured CGTMSE limits.
Working Capital & CGTMSE estimate
IndicativeMonthly instalment
₹1,71,224
₹43,82,847 of interest over 7 years
Working Capital Loans
A working capital limit is the maximum amount of short-term revolving credit a bank sanctions to a business to pay for everyday operational costs like inventory, wages, and raw materials. It lets a company borrow and repay money as needed over a period of usually one year.
Common Types of Limits
Cash Credit / Overdraft
Direct cash drawing power based on stock and book debts.
Letters of Credit
Short-term guarantees to pay suppliers.
Bank Guarantees
Promises to cover a specific performance or financial obligation.
How Banks Calculate the Limit
Turnover Method: Often set at 20% of projected annual gross sales for smaller units, where the business contributes a 5% margin. - want higher Loan - Connect with us
Operating Cycle: Assesses days tied up in inventory and receivables minus supplier credit payment days.
Working Capital Gap: Funded up to 75% of the gap between current assets and non-bank current liabilities.
CGTMSE — Collateral-Free Credit for Micro & Small Enterprises
The Credit Guarantee Fund Trust for Micro and Small Enterprises — key features, guarantee cover and eligibility.
What is CGTMSE?
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a joint initiative by the Ministry of MSME, Government of India, and SIDBI. Established in 2000, it provides Hybrid/collateral-free or unsecured credit up to ₹10 crore to new and existing micro and small enterprises through member lending institutions.
Key Features of CGTMSE
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Collateral-Free Coverage: Loans up to ₹5 crore (and up to ₹10 crore in select cases) do not require third-party guarantees or property collateral.
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Guarantee Cover: Offers risk coverage ranging from 75% to 85% of the sanctioned credit facility.
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Eligible Lenders: Scheduled commercial banks, selected regional rural banks, and non-banking financial companies (NBFCs).
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Fees: Borrowers pay a nominal Annual Guarantee Fee (AGF) based on the loan size and category.
Eligibility Criteria
Registration: Must possess a valid MSME Registration.
Business Type: Covers manufacturing and service enterprises, including retail and wholesale trade.
Excluded Entities: Agriculture, self-help groups, and training or educational institutions are generally not eligible.
Have a question about Working Capital & CGTMSE?
No two cases are the same, especially when collateral involves legal considerations. Talk to us directly, and we’ll help you understand your position.