Working capital loan and cash credit limit
A cash credit or overdraft limit funds stock and debtors. For limits up to ₹5 crore banks use the turnover method; above that they assess the working-capital gap from CMA data. Interest is charged only on the amount used.
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| Lender | Type | Rate range | Up to | Min score |
|---|---|---|---|---|
| Bank of Baroda Baroda MSME Term Loan / Cash Credit | Public Sector Bank | 8.15% – 10.75% | ₹50 Cr | 700 |
| Canara Bank Canara MSME Term Loan / Cash Credit | Public Sector Bank | 8.20% – 10.60% | ₹50 Cr | 700 |
| State Bank of India SME Term Loan / Cash Credit | Public Sector Bank | 8.25% – 10.50% | ₹50 Cr | 700 |
| Punjab National Bank PNB MSME Term Loan / Cash Credit | Public Sector Bank | 8.25% – 10.75% | ₹50 Cr | 700 |
| Union Bank of India Union MSME Term Loan / Cash Credit | Public Sector Bank | 8.25% – 10.75% | ₹50 Cr | 700 |
| HDFC Bank Secured Business Loan / Working Capital | Private Bank | 8.75% – 11.50% | ₹50 Cr | 720 |
| ICICI Bank MSME Secured Term Loan / Cash Credit | Private Bank | 8.75% – 11.50% | ₹50 Cr | 720 |
| SIDBI Direct Term Loan / Working Capital (MSME) | Development FI | 8.75% – 11.50% | ₹25 Cr | 700 |
| Axis Bank MSME Term Loan / Cash Credit | Private Bank | 9.00% – 11.50% | ₹50 Cr | 720 |
| Kotak Mahindra Bank Secured Business Loan / Working Capital | Private Bank | 9.00% – 12.00% | ₹25 Cr | 720 |
As on 26 Oct 2026, RBI repo rate 5.50%. Indicative ranges; your rate depends on your profile.
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Who is eligible
- Running business with GST returns and bank statements showing regular turnover
- Current ratio around 1.33 (current assets over current liabilities)
- Stock and debtors to back the limit; monthly stock statements are required
- Credit score of 700+ for most banks
How much you can get
- Turnover method (limits up to ₹5 crore): about 20% of projected yearly turnover from the bank, with 5% from you
- Above ₹5 crore: about 75% of the working-capital gap from CMA data
- Drawing power each month = eligible stock and debtors less margin
- Invoices on large buyers can be discounted separately on TReDS
Documents
- Audited financials and provisional figures
- CMA data for limits above ₹5 crore
- Stock and book-debt statement
- GST returns and bank statements for 12 months
Tips from our credit panel
- Base the request on next year’s projected turnover with GST data to back it
- Split the need between cash credit and bill/invoice discounting – discounting is often cheaper
- Under ₹20 lakh, micro and small units cannot be asked for collateral
Common questions
What is the turnover method?
For working capital up to ₹5 crore, banks assess the need at 25% of projected turnover and fund 20%, with the borrower bringing 5%.
Is interest charged on the full limit?
No, only on the amount used, calculated daily. Some banks charge a small fee if the limit is hardly used.
Do I need property for a cash credit limit?
Not up to ₹20 lakh for micro and small units. Above that, CGTMSE cover can replace collateral up to ₹10 crore.