Funds Your Permanent WC Gap
EMI or Drop-Line Structure
Working Capital Term Loan, For the Part of WC That Never Frees Up
Independent WCTL advisory from Inwealfoney. Where Cash Credit alone falls short of your assessed working capital gap, we structure a WCTL — EMI-based or reducing drop-line — and negotiate it against your best lender.
WCTL rates from
9.50% p.a.*
Tenure up to
96 months
What is a WCTL
Not quite Cash Credit, not quite a regular Term Loan
As a business grows, part of its working capital stops being "temporary" — it's permanently tied up in a higher base level of stock and receivables. A revolving Cash Credit limit isn't designed to fund that permanent portion efficiently. A Working Capital Term Loan (WCTL) is a structured facility, repaid over 3–8 years, specifically for this permanent working-capital gap — distinct from both a revolving CC/OD and a capex-focused Term Loan.
Revolving
Cash Credit / OD
Funds the fluctuating, day-to-day portion of working capital.
- Draw and repay repeatedly
- Interest on utilised balance only
- Renewed annually, no fixed EMI
This page
Working Capital Term Loan
Funds the permanent, non-fluctuating portion of working capital.
- One-time disbursal, structured repayment
- Tenure 3–8 years (up to 96 months)
- EMI-based, or a reducing drop-line limit
Capex
Regular Term Loan
Funds long-lived assets — machinery, property, new units.
- Tied to a specific asset/project
- Tenure 5–15 years
- Fixed EMI, moratorium during construction
DSCR & gap assessment
We model your actual permanent WC gap so you don't over- or under-borrow.
CC restructuring advisory
If your CC is running persistently overdrawn, we help convert the excess into a structured WCTL.
Multi-lender comparison
Your file is matched against several banks/NBFCs for the best rate and repayment structure.
EMI vs drop-line negotiation
We help you pick — and negotiate — whichever repayment structure suits your cash flow better.
How the WCTL amount is typically assessed
WCTL = Total Current Assets − Total Current Liabilities − Existing Cash Credit / OD Limit
In plain terms: your total assessed working capital requirement, minus what your Cash Credit/OD limit already covers. The shortfall — the part CC can't fund — is what gets structured as a WCTL, alongside your MPBF/DP-based CC limit.
Eligibility
Bank-sanctioned vs NBFC-route WCTL
WCTL is available both as a secured, bank-assessed facility (often alongside your CC) and as a faster, unsecured NBFC/fintech product.
- ✓Existing banking relationship preferredMost banks sanction WCTL as a top-up alongside your existing CC/OD account.
- ✓Business vintage: 2–3 yearsWith CMA data showing a consistent, growing current-assets base.
- ✓Hypothecation of current assetsSame stock/debtors security as CC; sometimes paired with collateral for larger amounts.
- ✓CIBIL/CMR of promoters: 700+Existing CC conduct (regularity, DP utilisation) weighs heavily.
- ✓Detailed CMA data & 2–3 years' financialsBank recomputes your total WC gap versus your sanctioned CC to size the WCTL.
- ✓Business vintage: 1–3 yearsGST filings and bank transaction history often substitute for a long track record.
- ✓Loan amount: typically up to ₹75–80 LakhSized for smaller and mid-sized businesses; larger permanent-WC gaps go through banks.
- ✓Minimal or no collateralAssessed on GST turnover, banking conduct, and repayment capacity.
- ✓CIBIL/CMR of promoters: 700+A clean repayment history on any existing loans matters more than collateral here.
- ✓Faster disbursal: 24–48 hours typicalDocumentation is lighter — GST returns and bank statements usually suffice.
WCTL at a Glance
Loan range₹5 Lakh – ₹5 Cr+
Interest rate9.5% – 20% p.a.
Tenure3 – 8 years (up to 96 mths)
Repayment structureEMI or Drop-line
Processing fee0.5% – 2%
Prepayment (floating)Nil, up to ₹7.5 Cr*
*Per RBI (Pre-payment Charges on Loans) Directions, 2025, effective for loans sanctioned/renewed on or after 1 Jan 2026 — see FAQs.
Repayment structure
Two ways a WCTL actually gets repaid
Unlike a plain term loan, WCTL isn't always a flat EMI — many banks and NBFCs structure it as a reducing "drop-line" limit instead. Which one you get changes your calculator inputs.
Fixed EMI
Standard EMI WCTL
Disbursed as a lump sum against your assessed WC gap; interest is usually charged on the full disbursed amount from day one, similar to a regular term loan.
- Predictable, level EMI every month
- Simple to plan cash flow around
- Common with NBFC/fintech WCTL products
- Once repaid, the limit is gone — not revolving
Reducing Limit
Drop-Line WCTL
The sanctioned limit steps down at a preset frequency (often quarterly) instead of a flat EMI — closer to an overdraft with a shrinking ceiling. Interest is charged only on the amount actually drawn within the available (declining) limit.
- Interest charged pro-rata on utilised amount
- Limit — not a fixed instalment — steps down over tenure
- Common with banks and larger corporate WCTL sanctions
- Gives more flexibility if utilisation varies month to month
Also used for restructuring: When a CC account runs persistently overdrawn beyond its Drawing Power, banks sometimes convert the excess/irregular portion into a WCTL with its own fixed repayment schedule — a common way to regularise the account without a fresh security cover.
Documentation
What you'll need to keep ready
Having these scanned and organised before you apply typically shaves days off sanction time.
KYC & Business Documents
- PAN & Aadhaar of all promoters/partners
- Business PAN & GST certificate
- Udyam/MSME registration
- Partnership deed / MOA & AOA / LLP agreement
Financial & CMA Documents
- Last 2–3 years' ITR with computation
- CA-certified / audited P&L and balance sheet
- CMA data showing current assets/liabilities trend
- Last 12 months' GST returns (GSTR-3B/1)
Bank & Facility Statements
- Last 12 months' current account statement(s)
- Existing CC/OD account statement & conduct history
- Sanction letter of the existing CC/OD limit
Working Capital Gap Proof
- Latest monthly stock statement
- Book debts / receivables ageing
- Computation of shortfall vs. sanctioned CC limit
Existing Credit Facilities
- Sanction letters of any running loans/CC/OD
- Latest CIBIL/CIR (company & promoters)
- NOC from existing lender, if switching banks
Collateral (if secured)
- Property/asset title documents, if pledged
- Latest valuation report
- Insurance policy covering hypothecated current assets
Note: Banks typically assess WCTL alongside your CC renewal, so your CMA data needs to show both limits together — not just the WCTL portion in isolation. We'll prepare it that way from the start.
Repayment Calculator
Model either repayment structure
Switch between the two common WCTL structures to see how the numbers actually play out.
₹30,00,000
11.0%
5 years
₹0
Monthly EMI
Principal
Total Interest
Tenure
0 months
Total Interest
₹0
Total Payment
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Structure
Flat, level EMI
*Indicative only. Standard reducing-balance EMI on the full disbursed amount over the chosen tenure. Actual computation and rate vary by lender.
₹30,00,000
10.5%
5 years
Assumes the full available limit is drawn each period (worst case). Actual interest will be lower if utilisation is partial — interest is charged only on what's drawn, like Cash Credit.
₹0
First Period Payment
Principal
Total Interest
Limit Drop / Period
₹0
Last Period Payment
₹0
Total Interest (max)
₹0
Total Payment (max)
₹0
*Indicative only. Limit reduces by an equal amount each period; interest is computed on the outstanding limit at the start of each period, assuming full utilisation. Actual interest is usually lower since it's charged only on funds drawn. Formula and frequency vary by lender.
How the Facility Actually Runs
01
Sanction alongside CC
Banks typically assess and sanction WCTL as part of the same working capital review as your CC/OD renewal.
02
Disbursement
Disbursed as a lump sum (EMI method) or made available as a declining limit you draw against (drop-line method).
03
Structured repayment
Fixed EMI, or a periodic instalment combining the limit drop plus interest on what was drawn — never revolving back up.
04
Annual review with CC
Reviewed alongside your CC facility each year; the WCTL amount is revisited if your permanent WC gap has changed.
FAQs
Common WCTL questions
A regular term loan funds a specific asset or project — machinery, property, expansion — usually over 5–15 years. A WCTL funds the permanent, non-fluctuating portion of your working capital itself, typically over a shorter 3–8 year tenure, and is usually assessed alongside your Cash Credit limit rather than a standalone project.
Cash Credit is revolving — you draw and repay repeatedly against a limit that resets, with interest only on the utilised balance. A WCTL is a one-time disbursement or a declining limit repaid over a fixed tenure; once repaid, the same amount doesn't become available again without a fresh sanction.
Instead of a flat monthly EMI, the sanctioned limit itself steps down by a fixed amount at set intervals (often quarterly). You pay interest only on what you've actually drawn within the available limit at that time — closer to an overdraft with a shrinking ceiling than a conventional instalment loan.
Banks typically start from your total assessed working capital requirement (based on projected current assets and liabilities), subtract what your sanctioned Cash Credit/OD limit already covers, and structure the remaining gap as the WCTL — alongside the standard DP-based CC sanction.
Yes — this is a common use case. If a CC account has been running persistently beyond its Drawing Power, banks sometimes carve out the excess into a separate WCTL with its own fixed repayment schedule, which regularises the CC account without requiring completely fresh security.
Bank-sanctioned WCTLs are usually secured by hypothecation of current assets (the same stock/debtors security as CC), sometimes with additional collateral for larger amounts. NBFC and fintech WCTL products are often unsecured or lightly secured, assessed mainly on GST turnover and banking conduct, but typically cap out at a lower amount.
Under the RBI (Pre-payment Charges on Loans) Directions, 2025, effective for loans sanctioned or renewed on or after 1 January 2026, floating-rate loans to individuals and MSEs, up to an aggregate sanctioned limit of ₹7.5 crore per borrower, cannot carry foreclosure or prepayment charges from banks and larger NBFCs. Always confirm the exact clause in your sanction letter, especially for fixed-rate or larger facilities.
Let's size your permanent working capital gap correctly
Share your current CC limit, latest financials, and stock/debtor cycle — we'll compute your WCTL requirement and compare lenders on your behalf, no cost, no obligation.
Inwealfoney · Loan advisory services. WCTL amounts, structures, rates and eligibility are indicative and subject to lender policy at the time of application.