Working capital finance refers to the funds provided to a company to finance its day-to-day operations, covering expenses such as raw material purchases, payroll, and utility bills. This type of financing ensures that a company has sufficient liquidity to meet its short-term obligations and sustain its ongoing business activities. The range of customized working capital finance options we offer includes:

• Cash Credit limit,
• Letter of Credit,
• Pre-shipment credit/ Pre- shipment credit in Foreign Currency (PCFC)
• Post-shipment Credit/ Foreign bill Discounting (PCF

What is Cash Credit?

Cash credit (CC) is for Meet Working capital Gap/Requirements, that allow businesses to borrow funds up to the sanctioned limit, with the flexibility to withdraw and repay funds as needed. Interest is only charged on the amount borrowed, making it a flexible financing option for managing working capital needs.
Features:

• Generally renews for 12 months
• CC is secured facility, therefore collateral is required other than Stock and Debtors
• The creditworthiness of the business is analysed through past financial statements and Projections for 2-3 Years
• processing fees is to be paid on every renewal.

Advantages:

• Interest is charged on daily closing balance instead of monthly EMI (as in case of Business Loan, Loan against property and Term Loan).
• Lower interest rate as compared to Business Loan.
• Applicable interest rate is RBI linked interest rate.

DIVINE Advantages:

• Divine specializes in providing funding from PSU Banks which offer CC facility at comparatively cheaper rate as compared to Private Banks, NBFCs and FIs.
• We assist our client to avail CC facility at minimum possible collateral security and even without Collateral security.
• Merge your existing Home Loan with CC facilities so as to offer the Home Loan mortgaged property as collateral for CC facility instead of offering separate property.

What is Letter of Credit?

Letter of credit (LC) is a like a promise from a bank to pay the seller on behalf of the buyer, but only if the seller meets certain conditions. It helps ensure that both parties fulfill their obligations and reduces the risk of non-payment or delivery issues in cross-border as well Domestic transactions. LCs can be used for both domestic and international trade transactions.
Features:

• This is Non fund base Working capital Facilities.
• Tenure can be Ranges from 90 days to 360 days depend upon Business Cycle.
• To import/Local Procurements goods without advance payment or upfront payment.
• LC Charges is available

Advantages:

• Low cost as compared to Cash Credit and Overdraft as only Charges are to be paid not interest

DIVINE Advantages:

• We can help you secure LCs within your existing sanctioned limits instead of fixed deposits as cash margin to obtain BG
• Help to avail LC limit for domestic procurement also.

What is Pre-shipment Credit/ Pre- shipment credit in Foreign Currency (PCFC)?

Pre-shipment (Packing credit) is available to exporters having export orders/ confirmed letters of credit, to meet the requirement of procuring raw material from domestic as well as from international market for manufacturing/ processing and packing of goods, and meeting costs related to shipment for exports. It is generally provided in Indian Rupees. PCFC is a type of packing credit wherein the bank lends in foreign currency. The exporter is liable to pay back the loan in the same foreign currency to the bank. Such a facility helps the exporter by making the credit available at interest rates link with internationally Benchmark rates.
Advantages:

• PCFC can be tailored to the specific needs of exporters, offering flexibility in terms of loan amounts, repayment schedules, and interest rates.
• PCFC supports exporters in expanding their export activities by providing the necessary financing to manufacture and prepare goods for shipment.
• Lower cost as compared to other working capital facilities such as Cash Credit, Overdraft, Term Loan, etc.
• Interest subvention is given by the central government.

What is Post-shipment Credit/ Foreign bill Discounting (PCFC)?

Post shipment finance refers to the credit or financial assistance provided to exporters after shipment of goods and until the receipt of payment from the importer. It addresses working capital needs of exporters during the period when goods are in transit and awaiting payment.
Advantages:

• Helps to bridge the working capital gaps by converting receivables to cash.
• The fund availability empowers them to take bigger orders, fulfill customer demands promptly, and establish a reputation for reliability and efficiency
• Mitigates the risk associated with international trade and potential losses
• Post shipment finance is a low-cost facility.
• Interest subvention is given by the central government.

Bank Guarantee (BG) a promise made by the bank to any third person that ensures payment or performance in case the customer defaults. The types of Bank Guarantees are as follows:

• Performance Guarantee
• Financial Guarantee

Uses:

• Bidding process of Government/Private contracts, Construction contracts or tenders to demonstrate bidder’s commitment and financial capability.
• As performance bonds by the contractors to guarantee their performance and completion of project according to the terms of contracts.
• Importer uses BGs as a form of guarantee to the exporter ensuring payment upon delivery of goods.
• Exporter provides BG to importer to guarantee performance and quality.
• SME business provides BG to large companies when the large order is placed by them.
• BGs can used in the form of Security Deposit for Govt Department like Electricity and GST Department etc.

Advantages:

• Cost is low as compared to other alternative financing options such as Cash Credit, Overdraft, etc.
• Less documentation

DIVINE Advantages:

• We can help you secure BGs within your existing sanctioned limits instead of freezing your liquidity in 100% cash margin/ fixed deposits to obtain BG.
• Help you avail separate Performance and Financial BGs within sanctioned limits.

Real Estate Finance includes the financial activities and instruments involved in the acquisition, development, and management of real estate properties. It involves various forms of financing, such as loans, mortgages, equity investments, etc., to fund real estate projects, purchase properties, or refinance existing debts. It's like the financial engine that keeps the real estate market moving and growing. Our range of services include:

• Project Specific Finance for Real Estate Developers
• Structured Finance for Real Estate Developers
• Funding against Inventory for Real Estate Projects

What is Project Specific Finance for Real Estate Developers?

Project-specific finance for real estate developers refers to tailored financial solutions that are designed to fund individual real estate development projects. This type of financing is essential for developers as it provides the necessary capital to cover various stages of a project, including land acquisition, planning, construction, and project completion. We provide specialized financial services tailored to a variety of real estate development projects such as:

• Project on Freehold Land: Financing solutions for developments on land owned outright by the developer.
• Project on Leasehold Land: Financing options for projects on land leased by the developer for a period of time.
• Society Redevelopment Project: We assist the developers to avail finance for the redevelopment of existing residential societies.
• SRA Project on Public/ Private Land: We also experience in financing Slum Rehabilitation Authority (SRA) projects, whether on public or private land.
• Joint Venture Project Finance: In joint venture real estate projects, developers and landowners collaborate with a pre-determined revenue-sharing arrangement. We specialize in providing financial solutions tailored to such collaborative ventures, ensuring developers secure the necessary funding for such projects.

What is Structured Finance for Real Estate Developers?

Real estate projects are highly volatile due to factors like fluctuating raw material prices and changing government regulations, often leading to delays or standstills. As a result, banks and financial institutions view these projects as high-risk and are hesitant to provide funding. We specialize in helping developers secure financing for such high-risk projects. We specialize in securing financing for real estate projects facing inadequate cash flows, ensuring that developers have the necessary funds to maintain project momentum. Additionally, we facilitate to structure the combination of 2-3 debt products to fulfill developer requirement and also the transition from high-cost debt to more affordable financing options. This lowers overall project costs enabling successful project completion.

Funding against Inventory for Real Estate Projects?

We assist the developers to avail fund for their projects against unsold inventory from previously completed projects.
Divine Advantage
Real Estate Financing with Minimum Security and No Collateral in some cases provided all other requisite conditions are complied with.

Channel financing, also known as dealer financing, is an arrangement to finance channel partners like authorised distributors, dealers or buyers for the purchase of goods or services directly from manufacturers or suppliers. This type of financing allows manufacturers or suppliers to offer extended payment terms to their dealers or buyers while ensuring prompt payment for their goods.
Uses:

• The facility can used by MSME for various products likes electronics, vehicles, petrol pumps, computer hardware and spares and many more.
• Distributors and/or business having Agency use channel finance to purchase inventory from manufacturers or suppliers.

Advantages:

• Collateral free finance as funds is provided against unpaid purchase invoices.
• Sellers are able to receive to immediate payment from banks.
• Low interest rate as compared to other working capital facilities.
• Minimum documentation, Simplified process and expedited sanction.

Project finance refers to the funding of long-term projects, such as public infrastructure, industrial projects, and others through a specific financial structure. Finances can consist of a mix of debt and equity. The cash flows from the project enables repayment of debt and equity. Features:

• Project finance depends on future cash flow for repayment of debt.
• The Assets or right held under the project acts as collateral for finance.
• The repayment of debt starts after commencement of operations
• MSME Project Loans are offered to help smaller businesses.

A term loan is a type of loan where a business is provided with a specific amount of money that is repaid over a set period of time, typically in regular installments. The loan amount, interest rate, repayment schedule, and other terms are customised as per the projects and income generated therefrom for which the loan is taken.
Features:

• Generally used as Long term financing option
• Used for financing new projects, expansion of project modification in existing plant and any other capital expenditure or business expansion.

Advantages:

• Capital expenditure is funded by Term Loans, so working capital finance will not affect the business.
• Can be paid off before schedule and carry no penalties.
• Can be advantageous if used only for the purpose of capital expenditure.

Every manufacturing requires funds for small upgradation, replacement and repairs of expensive and/or imported Machinery as well as for some unplanned capex in existing plant and machinery. The Open Term Loan is sanctioned without any specific proof of Capital expenditure (quotations, proforma invoices, etc) to be provided at the time of sanction.
Features:

• The loan is limit which is can be utilized generally, within a period of one year.
• This facility is generally available in the bank, where the organisation has existing credit facilities.
• The repayment of Open Term Loan is same as any other Term Loan i.e. over a period of 5 years- 10 years as per sanction terms.

Advantages:

• The Interest is typically only paid on the amount borrowed, not the entire loan, which is be more cost-effective than a fixed term loan.
• The ability to access funds quickly without reapplying each time for small amount which can save time and reduce administrative burden.
• Minimum documentation and easy approval as the Bank has the organisation’s credit and financial history.
• The working capital of the business is not affected as the capital expenditure is incurred through Term Loan.

Micro, small and medium enterprise (MSME) loans is a collateral free loan that helps entrepreneurs meet various business-related expenses. As per the Indian government and RBI, these loans are for certain business enterprises who classified as MSME entities under Micro, Small and Medium Enterprises Act, 2006 which is decided on the basis of Investment and Turnover Threshold limits as specified under the Act.
Features:

• MSME registration with the government is required to avail this facility.
• MSME loans backed by government guarantee under CGTMSE, offer collateral free loans to eligible entities, however the government charges annual fees as a percentage of loan amount against which government guarantee is availed.
• Credit facilities can be availed in the form of Cash Credit facility, LC facility, BG facility & Term loan.
• Maximum loan which can be availed is Rs 5 Cr.
• This facility can be availed by any manufacturers, traders and service providers.

Advantages:

• This facility is without any collateral security and third party guarantee which is beneficial for small entrepreneurs to grow their business.
• Small self-funded business can use this facility to expand their business.

Gold Metal Loan (GML) is a mechanism under which a jewellery manufacturer/trader borrows gold metal instead of rupees and settles the GML with the sale proceeds obtained.
Features:

• Fulfills working capital requirement of jewellery manufacturers/trader
• Upfront delivery of gold with flexibility of fixing the gold price within 180/270 days
• Repayment of Gold Metal Loan in equivalent INR
• Attractive interest rate
• Loan Quantity: Minimum 1 Kg; Maximum Limit as defined by Banks
• In Gold Price risk is always open.

Equipment finance is a type of business loan that allows businesses to acquire the necessary equipment for their operations without having to pay the full cost upfront. Instead, businesses can either lease the equipment or take out a loan to purchase it.
Features:

• Businesses can access the tools and machinery without blocking their working capital and maintain liquidity for operations.
• Equipment financing may be through obtaining a loan to purchase equipment or by leasing equipment.
  1. Leasing:c Allows businesses to use the equipment for a specific period with the option to buy, return, or upgrade at the end of the lease term.
  2. Loans: Provides funds to purchase equipment outright, which are repaid over time with interest.
• Financing can cover not just the purchase price of the equipment but also associated costs such as installation, maintenance, and training.

Advantages:

• Helps businesses to keep their capital reserves intact, allowing them to invest in other critical areas such as inventory, marketing, or expansion.
• Leasing, in particular, allows businesses to upgrade to newer equipment more frequently, ensuring they have access to the latest technology without large upfront costs.
• Monthly payments make it easier for businesses to budget and plan for future expenses.
• This is a loan collateral free loan.

External Commercial Borrowing (ECB) is an instrument used to facilitate Indian companies or big corporations to raise money outside the country in foreign currency. It is basically a loan availed by an Indian company from a non-resident foreign lender including overseas subsidiaries of Indian Banks. These borrowings are used for a variety of purposes, including funding capital expenditures, expanding operations, and refinancing existing debt.
Features:

• International financial institutions, banks, foreign capital markets, export credit agencies, suppliers of equipment, and foreign collaborators are typical lenders in ECB transactions.
• ECBs are usually denominated in major international currencies such as USD, EUR, GBP, or JPY.
• Interest rates on ECBs can be fixed or floating, often linked to internationalbenchmarks like LIBOR (London Interbank Offered Rate) or EURIBOR (Euro Interbank Offered Rate).
• ECBs are subject to regulations and guidelines set by the Reserve Bank of India, which outline eligibility criteria, end-use restrictions, and other compliance requirements.

Advantages:

• ECBs allow borrowers to access large capital, which may not be available domestically, particularly for large infrastructure and industrial projects for long term
• ECB’s is linked with international benchmark which is cheaper than the Indian interest rates.
• ECB’s are more beneficial to companies which are having foreign currency income to avoid hedging cost by way of natural hedge.

Loan against Property

A Loan Against Property (LAP) is a secured loan where a business pledges a property as collateral to obtain funds from a lender. The loan is secured by residential, commercial, or industrial property.
Features:

• Loan Amount is based on Property Valuation.
• The Collateral is in the form of immovable property.
• Competitive interest rates.
• LAP is a long-term based loan and the repayment tenure is usually flexible.

Advantages:

• The interest rates are lower compared to unsecured loans.
• Property Owners can continue to use and occupy the property even after mortgage it as collateral, provided they adhere to the loan terms and repayment schedule.

Lease Rent Discounting

A Lease Rental Discounting (LRD) is a Term Loan offered against income-producing commercial/industrial assets/property. The LRD Loan works on the premise that your leased property derives fixed rent, which you can use as a ‘Collateral’ to generate funds, instantly. Features:

• Loan is secured by rental cash flows
• Tenant pays rent to lender directly.
• Extended loan tenures with rental income repaying EMIs ensure steady cash flow

Advantages:

• Property owners can monetise their rental income to access funds quickly.
• Since LRD is a secured loan, its interest rates are usually lower than an unsecured loan, making it cheaper than other financing options.
• A longer-term provided by LRD loans gives property owners more time to repay their loan in smaller instalments.
• Property owners can use LRD funds without any restrictions.

Loan Against Securities

A Loan Against Securities (LAS) is a type of loan where the owners pledge their securities such as listed stocks, mutual funds, bonds, and other financial assets as collateral to obtain a loan from a lender. LAS allows to leverage investments and receive immediate liquidity without having to sell the securities.
Features:

• Loan value would depend on the cash value of the securities
• Security should be easily marketable, transferable and liquid assets are preferred
• Loan against securities are offered as an overdraft facility
• Flexible withdrawal, tenure and repayment schedule is available for this type of loan

Advantages:

• Access funds without selling your investments, enabling their continued growth.
• Enjoy cost-effective financing with lower interest rates compared to unsecured loans.
• Experience a streamlined process with rapid approval and fund disbursement.
• Gain flexibility in repayment, allowing borrowers to choose full or partial repayment at their convenience, ideal for those with irregular income or installment needs.

A Mortgage OD Limit is a financial tool that allows businesses to withdraw money from their bank account on credit, even if the account balance is zero. It provides a credit line for relief against temporary cash flows issues. An overdraft facility against property allows for a higher credit limit due to the collateral involved.
Features:

• Each Overdraft has an approved credit limit, which varies based on your creditworthiness and the bank's policies.
• Interest is charged only on the amount utilised, not the approved limit.
• Repayment is not done through EMIs. You have the flexibility to repay the amount as per your cash flow.
• A minimum monthly payment is usually required to repay the debt. This includes the interest on the borrowed amount.

Advantages:

• Provides immediate funds to meet urgent cash requirements.
• Offers the freedom to withdraw and repay as per convenience.
• Charges interest only on the amount used.
• Eliminates the burden of fixed monthly repayments.