Working Capital India.
Know exactly where you stand.

Working capital requirement = (Debtor days + Inventory days − Creditor days) ÷ 365 × Annual revenue. Example: Debtor days 60, Inventory days 30, Creditor days 20 → CCC = 70 days. For ₹10Cr annual revenue: working capital requirement = 70 ÷ 365 × ₹10Cr = ₹1.92Cr. If your CC/OD facility is only ₹1Cr, you have a ₹92 lakh funding gap — which explains the cash flow stress. IBEAN's Virtual CFO calculates this monthly and recommends the right facility limit.

TReDS (Trade Receivables Discounting System) is an RBI-regulated electronic platform for discounting trade receivables of MSMEs. Platforms: RXIL, M1xchange, InvoiceXchange. How it works: you upload an invoice from a large corporate buyer; the buyer accepts the invoice on the platform; multiple financiers (banks, NBFCs) bid to discount it at competitive rates; you receive funds immediately (typically within 24–48 hours). Benefit: faster cash flow without the documentation burden of traditional bank discounting. Rate: typically 7–11% per annum. RBI mandates that companies with turnover above ₹500Cr must register on TReDS and accept invoices from their MSME suppliers within 30 days.

Cash Credit (CC): a revolving credit facility where you can draw up to the sanctioned limit, and the balance fluctuates daily as you receive and make payments. Interest is charged on the average daily utilised balance. The bank holds inventory and book debts as primary security (hypothecation). Best for: businesses with fluctuating daily cash needs and inventory cycles. Overdraft (OD): similar revolving structure but secured against fixed deposits, property, or other collateral — rather than inventory/debtors. Best for: businesses with property or FD as security, where the CC security valuation would be complex. For most Indian SMEs, CC against book debts and inventory is the primary working capital facility.

CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) provides guarantee coverage for working capital CC facilities for MSMEs without collateral. Coverage: 75–85% of the outstanding CC limit, up to ₹2Cr. Benefit: banks are more willing to sanction a CC without requiring immovable property as collateral when CGTMSE guarantee covers most of their risk. Process: apply to a member lending institution (bank or NBFC) that participates in CGTMSE; they apply for the guarantee on your behalf. Guarantee fee: 0.5–2% of outstanding amount per year, paid by you to CGTMSE through the bank. IBEAN's Virtual CFO identifies the right lender and manages the CGTMSE application.