Working Capital Limits (Fund Base and Non Fund Base)
Working capital or the measure of a company's ability to pay off its short term debt is the difference between current assets and current liabilities.
We are into syndication of working capital limit (Both Fund Base and Non Fund Base) for Indian company both in Indian currency as well as foreign currency. We can also propose an enhancement of Working Capital Limits (Both Fund Base and Non Fund Base) with the optimum utilization of your enhanced facilities.
Every Corporate/Firm/Entity requires working capital finance to meet the entire range of short-term fund requirements that arise within their day-to-day operational cycle.
Working capital loans can help company in financing inventories, managing internal cash flows, supporting supply chains, funding production and marketing operations, providing cash support to business expansion and carrying current assets.
There are many types of working capital finance. It is normally in the form of Fund Based Finance and Non Fund Based Finance depending upon the requirement of Industry, Trade and Service Sector.
Term loan are usually required for a capital expenditure such as constructing a new factory, buying, machinery, purchasing of office or expansion and up gradation of existing factory. Ad’s got expertise in getting loan approved in its preferred mode. we study future cash flow very thoroughly and make sure that the term of loan will be according to that only .We also have special expertise in raising ECB for Indian expenditure and Foreign Term Loan on imports of capital grounds by the route of buyers credit which is now allowed upto 5 years.
Cash Credit is also known as Working Capital .Cash Credit is a facility to withdraw the amount from the business account even though the account may not have enough credit balance. The limit of the amount that can be withdrawn is sanctioned by the bank based on the business cycle of the client and the working capital gap and the drawing power of the client. This drawing power is determined, based on the stock and book debts statements submitted by the borrower at monthly intervals against the security by hypothecating of stock of commodities and/ or book debts.
Buyer's credit is the credit availed by an Importer (Buyer) from overseas Lenders i.e. Banks and Financial Institutions for payment of his Imports on due date. The overseas Banks usually lend the Importer (Buyer) based on the letter of Credit (a Bank Guarantee) issued by the Importers (Buyer's) Bank. In fact the Importers Bank brokers between the Importer and the overseas lender for arranging buyers credit by issuing its Letter of Comfort for a fee. Buyer’s credit helps local importers access to cheaper foreign funds close to LIBOR rates as against local sources of funding which are costly compared to LIBOR rates.
When running a business, you might come across a situation that your client may ask you to provide a financial guarantee from a third party. In such circumstances, approach your bank and ask it to stand as a guarantor on your behalf. This concept is known as bank guarantee (BG). We as AD's will help you in arranging BG from banks. This is usually seen when a small company is dealing with much larger entity or even a government across border.
PACKING CREDIT (POST & PRE SHIPMENT)
Packing credit limit is a facility sanctioned to an exporter in both Pre-Shipment and Post-shipment stage. This facilitates the exporter to purchase raw materials and manufacture or produce goods according to the requirement of the buyer and get it packed for onward export. Packing Credit limit covers all the working capital needs of the exporter including raw materials, wages, packing costs and all pre-shipment costs. Packing credit limit is available generally for a period of 90 days and the exporter has to pay lower rate of interest compared to Overdraft or Cash Credit facility.
L C DISCOUNTING
LC Discount is Letter of Credit Discount. The Letter of Credit from the prime banks or financial institutions is considered as a complete security. A Letter of Credit is a letter from Bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. Let's consider that the consignee wants to pay you after 90 days after it reaches him. But you want to be paid immediately after the documents are accepted. The banks will offer to pay you on a discount basis, meaning that they deduct a percentage from the value owing to you, which they keep as the cost of discounting; you get paid immediately the value less that the discount.
LETTER of CREDIT
Credit letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. Letters of credit are often used in international transactions to ensure that payment will be received. Due to the nature of international dealings including factors such as distance, differing laws in each country and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade. The bank also acts on behalf of the buyer (holder of letter of credit) by ensuring that the supplier will not be paid until the bank receives a confirmation that the goods have been shipped.