Hi, Can you please tell me the procedure for Overdraft Facility against working capital requirements?. In our company we are planning to go for OD. Please help me in this regard.
From India, Velluru
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23From India, Velluru
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Dear Sir,
For getting OD for Working Capital, you have prepare the financial proposal like project on hand, working capital necessary on short term basis and revenue receivable along with payment schedules. The same to be furnished to your preferred bank. The bank, after verifying your proposal ask for more clarifications and forms to filled by the Guarantors. Your company auditor may assist you in this regard.
With Regards,
C.Renuka
From India, Madras
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For getting OD for Working Capital, you have prepare the financial proposal like project on hand, working capital necessary on short term basis and revenue receivable along with payment schedules. The same to be furnished to your preferred bank. The bank, after verifying your proposal ask for more clarifications and forms to filled by the Guarantors. Your company auditor may assist you in this regard.
With Regards,
C.Renuka
From India, Madras
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Dear Yesurajja,
In banking terminology, an overdraft cannot be considered as part of working capital. The facility you require is a Cash Credit for working capital, and you need to approach your banker. Please provide the last three years' audited balance sheets with the application in the bank's prescribed format. The bank will review your financial data as well as the turnover in your existing account. Based on this information, they will determine your working capital requirement, which refers to the funds necessary that are tied up by your company.
Generally, the working capital gap is calculated by subtracting Current Assets from Current Liabilities, resulting in the "Working Capital Gap." Banks typically prefer to finance 70% of this gap. Additionally, your company will need to pledge the stock, trading stock, and debtors. The bank may also request the mortgage of some property.
With Regards,
A. Prakash
From India, Halol
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In banking terminology, an overdraft cannot be considered as part of working capital. The facility you require is a Cash Credit for working capital, and you need to approach your banker. Please provide the last three years' audited balance sheets with the application in the bank's prescribed format. The bank will review your financial data as well as the turnover in your existing account. Based on this information, they will determine your working capital requirement, which refers to the funds necessary that are tied up by your company.
Generally, the working capital gap is calculated by subtracting Current Assets from Current Liabilities, resulting in the "Working Capital Gap." Banks typically prefer to finance 70% of this gap. Additionally, your company will need to pledge the stock, trading stock, and debtors. The bank may also request the mortgage of some property.
With Regards,
A. Prakash
From India, Halol
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