Working Capital

A WCTL is a term-based facility used to meet working capital requirements where a business requires a defined amount of funding with a structured repayment schedule.

It can be considered where the business needs longer-duration working capital support rather than a purely revolving facility.

A Letter of Credit is a bank-backed payment undertaking generally used in trade transactions.

It can provide comfort to a supplier that payment will be made subject to the terms and conditions of the LC.

Aura Fund can assist eligible businesses in evaluating LC limits based on their business activity, transaction volume, financial strength and lender requirements.

A Bank Guarantee is a commitment issued by a bank on behalf of its customer in favour of a beneficiary.

BGs may be used for purposes such as:

• Performance obligations
• Contractual requirements
• Tender participation
• Security deposits
• Advance payment requirements
• Statutory or commercial obligations

The type and amount of BG facility depends on the underlying transaction and lender assessment.

Yes. Aura Fund can evaluate LC and BG requirements along with the overall working capital structure.

Depending on the business profile, these may be structured as part of an overall fund-based and non-fund-based working capital limit.

Fund-Based Finance provides actual access to funds—for example, CC, OD, WCTL, invoice discounting or machinery finance.

Non-Fund-Based Finance primarily provides a bank-backed commitment—for example, LC or BG.

A business may require both types of facilities depending on its operating and contractual requirements.

Yes. Existing CC/OD facilities can be evaluated for enhancement based on factors such as:

• Increase in turnover
• Higher working capital requirement
• Growth in inventory
• Increase in receivables
• Improved financial performance
• Banking conduct
• Business expansion
• Additional security, where required

The final enhancement is subject to lender assessment.

Yes. Aura Fund can evaluate working capital takeover/balance transfer requirements.

Depending on the profile, the proposal may also be assessed for enhancement, additional working capital or other related facilities.

Supply Chain Finance is a financing mechanism that helps businesses and their suppliers or buyers manage working capital and payment cycles.

Depending on the structure, facilities may include:

• Vendor Finance
• Dealer Finance
• Invoice Discounting
• Receivables Finance
• Payables Finance
• Purchase Order Finance
• Channel Finance
• Bill Discounting

Eligibility depends on the strength of the business ecosystem, underlying transactions and lender's programme.

Vendor Finance enables eligible suppliers/vendors to receive financing against eligible invoices or approved transactions.

It can help vendors improve cash flow while allowing the buyer to manage its payment cycle according to agreed commercial terms.

Dealer Finance provides funding to eligible dealers or distributors for purchasing goods from manufacturers or large suppliers.

The facility can help dealers manage inventory and working capital requirements without relying entirely on their own cash resources.

Invoice Discounting allows an eligible business to obtain financing against eligible outstanding invoices/receivables.

Instead of waiting for the customer to make payment according to the agreed credit period, the business may receive financing against the eligible receivable, subject to lender terms.

Purchase Order Finance provides funding against eligible purchase orders or confirmed orders, subject to the lender's assessment of the buyer, transaction, supplier and underlying business.

It can be useful where a business has confirmed orders but requires funds to procure or manufacture the goods.

Yes. Aura Fund can evaluate financing for the purchase of new or used machinery and equipment, subject to lender eligibility.

Machinery funding may be considered for:

• Manufacturing equipment
• Plant & machinery
• Construction equipment
• Commercial equipment
• Medical equipment
• Industrial machinery
• Business expansion equipment
• Replacement/modernisation of existing machinery

The financing structure depends on the asset, business profile, contribution, cash flows and lender policy.

Yes. Depending on the business requirement, machinery finance can be structured alongside working capital facilities such as CC, OD or WCTL.

For example, a business expanding its production capacity may require machinery finance + enhanced working capital limits.

Aura Fund can evaluate the overall requirement rather than looking at each facility in isolation.

CGTMSE refers to the Credit Guarantee Fund Trust for Micro and Small Enterprises. Under its Credit Guarantee Scheme, eligible credit facilities extended by participating lending institutions to eligible Micro and Small Enterprises may receive guarantee cover, subject to the applicable scheme conditions. The scheme can cover certain fund-based and non-fund-based facilities.

CGTMSE is a credit guarantee mechanism and not itself a lender. The loan or facility is sanctioned by the participating lending institution.

Eligible Micro and Small Enterprises may be able to obtain working capital facilities under the applicable CGTMSE framework, subject to lender and scheme eligibility.

The current scheme provides for eligible fund-based and/or non-fund-based facilities, with applicable exposure limits and conditions varying by type of lending institution.

Aura Fund can evaluate whether a business may be suitable for a CGTMSE-backed financing route.

CGTMSE provides guarantee cover subject to the scheme's eligibility and conditions; it does not mean that every borrower is automatically entitled to a collateral-free loan.

The scheme also provides for a Hybrid/Partial Collateral Security model, where part of the facility can be secured and the eligible unsecured portion may receive guarantee cover, subject to applicable conditions.

The final requirement for collateral, guarantees and other security is determined by the lending institution and applicable scheme rules.

Eligibility is determined under the applicable CGTMSE scheme and by the participating lender.

Broadly, eligible Micro and Small Enterprises can be considered, subject to applicable business, financial, credit and documentation requirements. The lender remains responsible for assessing the borrower's creditworthiness and sanctioning the facility.

Yes. Subject to the applicable scheme conditions, CGTMSE can cover eligible term loan and/or working capital facilities. The scheme also recognises certain fund-based and non-fund-based facilities.

Depending on the business and lender, we can evaluate various facilities, including:

• Cash Credit
• Overdraft
• WCTL
• LC
• BG
• Bill Discounting
• Invoice Discounting
• Vendor Finance
• Dealer Finance
• Supply Chain Finance
• Purchase Order Finance
• Receivables Finance
• Machinery Finance
• Short-Term Business Finance
• Structured Working Capital
• Trade Finance
• Export/Import-related finance, where applicable
• Other customised funding structures

Yes. Rather than evaluating each requirement separately, Aura Fund can assess the business's complete funding cycle.

For example, a manufacturing company may require:

CC + LC + BG + Machinery Finance + Vendor Finance

while a trading company may require:

OD + Invoice Discounting + Purchase Order Finance + BG/LC

The final structure depends on the business model, transaction cycle, financials, security and lender policies.

The requirement is generally assessed based on factors such as:

• Annual turnover
• Operating cycle
• Inventory holding period
• Receivable cycle
• Payable cycle
• Business margins
• Banking transactions
• Existing working capital limits
• Financial statements
• GST data
• Industry norms
• Projected growth

The exact assessment methodology varies by lender and facility.

Common documents may include:

Business & KYC

• PAN
• Aadhaar/other KYC
• Constitution documents
• GST registration
• Udyam/MSME registration, where applicable

Financial Documents

• Audited financial statements
• Income Tax Returns
• GST returns
• Current account statements
• Existing loan statements
• Debtor/creditor details
• Stock statements
• Ageing of receivables
• Projected financials, where applicable

For LC/BG

• Underlying purchase orders/contracts
• Work orders
• Tender documents
• Beneficiary details
• Proposed LC/BG format, where applicable

Additional documents may be required based on the facility.

Lenders may evaluate:

• Business vintage
• Turnover
• Profitability
• Cash flows
• Banking conduct
• Existing debt
• Credit history
• Stock and receivables
• Customer concentration
• Supplier profile
• Industry risk
• GST and tax compliance
• Promoter profile
• Collateral/security
• Nature and purpose of the facility

Each lender applies its own credit and risk assessment framework.

Potentially, yes. Growth in turnover can increase the requirement for inventory and receivables funding.

Aura Fund can evaluate an existing facility for enhancement, additional limits or restructuring based on the business's financial performance and actual working capital cycle.

Yes. Depending on the business profile, Aura Fund can evaluate unsecured, partially secured, cash-flow-based, supply-chain-based and applicable government-guarantee-backed financing structures.

However, the availability of collateral-free or partially secured funding depends on lender and scheme eligibility.

Yes. Depending on the overall financial position, businesses may use a combination of:

Working Capital + Term Loan + LAP + Machinery Finance + LC/BG

Aura Fund can assess the overall funding requirement and explore an appropriate financing structure.

Yes. We can evaluate situations involving:

• Insufficient CC/OD limits
• Working capital shortages
• Existing lender constraints
• Debt consolidation
• Takeover and enhancement
• Additional collateral-backed funding
• Restructuring or refinancing, where appropriate
• Alternative working capital structures

Any restructuring or refinancing remains subject to lender assessment and applicable regulations.

The timeline depends on the facility, size of the requirement, complexity of the business, documentation, security and lender's credit process.

Straightforward cases with complete documentation may move faster, while large-ticket, structured, LC/BG, project-linked or multi-facility transactions may require additional assessment.

Aura Fund aims to keep the process structured and coordinate with the relevant stakeholders to minimise avoidable delays.

Yes. We can review the broad reasons for rejection and assess whether another lender, facility type or financing structure may be suitable.

However, approval is always subject to the concerned lender's independent credit assessment.

Yes. We assist eligible MSMEs with various working capital requirements, including CC, OD, WCTL, LC, BG, supply chain finance, invoice discounting, machinery finance and applicable CGTMSE-backed facilities.

The appropriate product depends on the business profile and requirement.

Aura Fund can help businesses:

• Understand the appropriate facility
• Assess fund-based and non-fund-based requirements together
• Identify potential lender options
• Structure the proposal
• Organise documentation
• Coordinate with lenders
• Evaluate enhancement/takeover opportunities
• Explore applicable government-backed financing routes
• Coordinate the process through sanction and disbursement/activation

Our objective is to help businesses build a financing structure aligned with their actual operating cycle and growth requirements.

Share your basic business details and funding requirement with our team.

We can initially understand:

Business Profile → Turnover → Existing Banking → Current Facilities → Funding Requirement → Security → Proposed End-Use

Based on the initial assessment, we can identify potential financing routes and guide you through the next steps.

Call / WhatsApp +91 76250 65345 · Email Operation@aurafund.co.in