A working capital loan fills the gap between what your business earns and what it spends day-to-day. For construction contractors in India, this gap is a chronic challenge: projects pay on milestone completion, but labour wages, cement deliveries, and subcontractor bills are due every week.
Who Needs a Working Capital Loan?
- Construction contractors waiting for project milestone payments
- Manufacturers buying raw materials before receiving customer payments
- Traders who buy in bulk for seasonal demand before sales receipts
- Service businesses with 30–90 day payment collection cycles
- Exporters needing pre-shipment finance while waiting for letters of credit
Types of Working Capital Facilities in India
| Type | How It Works | Best For |
|---|---|---|
| Cash Credit (CC) | Revolving overdraft — draw as needed, pay when cash comes in | Regular operational expenses |
| Working Capital Term Loan | Fixed loan with EMI repayment over 1–3 years | One-time operational investment |
| Invoice Discounting | 80–90% of invoice value disbursed instantly | B2B businesses with receivables |
| Bill Discounting | Bank advances against trade bills before due date | Businesses with institutional clients |
| MUDRA Kishore | Government-backed loan up to ₹5 Lakh | Small businesses under 5 years |
💡 Pro Tip
Cash Credit (CC) is the most flexible working capital facility — you pay interest only on what you draw, not the entire limit. A ₹20 Lakh CC limit with ₹8 Lakh drawn means you pay interest only on ₹8 Lakh. Far more cost-effective than a term loan if your cash needs fluctuate.
Eligibility for Working Capital Loan in India
| Parameter | Minimum Requirement |
|---|---|
| Business age | 12 months of operation |
| Annual turnover | ₹10 Lakh (for most NBFCs) |
| Bank statements | 12 months, showing regular credits |
| CIBIL score | 650+ (promoter) |
| GST filing | Preferred but not mandatory below ₹25L |
Apply for Working Capital Loan on Biddaro
Apply at biddaro.com/loan-apply. Select Working Capital Loan, enter your requirements, and our team matches you with the best lender for your turnover and geography. Approval in 3–5 working days. Subscription ₹100/month.