A Manufacturing Business Bridges a Seasonal Cash Flow Gap

The challenge

A small auto-component manufacturer in the Faridabad industrial belt found itself in a familiar bind: its largest buyer paid on a 60-day credit cycle, but raw material suppliers expected payment within 15 days. As order volumes grew, the gap between paying suppliers and getting paid by the buyer widened — even though the business was profitable on paper.

Why a term loan wasn't the right fit

The business initially considered a standard business loan, but the actual need wasn't a one-time injection of capital — it was a recurring, short-term gap that repeated every production cycle. A working capital facility, structured around that cycle, was a better match than a lump-sum term loan that would have been repaid on a fixed schedule unrelated to the business's actual cash flow.

What the financing addressed

• Covered the gap between supplier payments and buyer receivables
• Sized to the business's GST-declared turnover and existing banking relationship
• Structured as a revolving facility, rather than a fixed lump-sum repayment

The outcome

With the cash flow gap addressed, the business was able to take on a larger order from the same buyer without delaying supplier payments — something that would have been difficult to manage on existing cash reserves alone.