Working Capital Term Debt (WCTL) Sizing Calculator
How should sticky or hardcore Cash Credit irregularity be carved out into a structured Working Capital Term Facility (WCTL) to restore financial health?
Financial Inputs
Current sanctioned fund-based working capital facility.
Persistent debit balance that does not fluctuate with seasonal cash flows.
Number of years to amortize the carved-out term debt.
Agreed interest rate for the structured term debt.
Projected annual earnings before interest, tax, depreciation, and amortization.
Annual principal + interest payments on pre-existing term loans.
Monthly WCTL Amortization Installment
Carving out sticky/hardcore cash credit irregularity of ₹300 Lakh into a 4-year Working Capital Term Facility (WCTL):
WCTL Principal Carve-Out
3,00,00,000
Right-Sized Revolving Cash Credit Limit
5,00,00,000
Annual WCTL Repayment Burden
92,60,742
Key Financial Takeaways
- Carving out sticky/hardcore cash credit irregularity of ₹300 Lakh into a 4-year Working Capital Term Facility (WCTL):
- Your active revolving Cash Credit limit is right-sized to ₹500 Lakh, eliminating recurring account irregularity flags and penal charges.
- The WCTL facility requires a structured monthly installment of ₹771.73 Thousand (₹92.61 Lakh/year at 10.75% p.a.), generating a post-restructuring DSCR of 1.26x against your projected EBITDA.
Frequently Asked Questions
What causes "hardcore" working capital in a Cash Credit account?
Hardcore working capital arises when an enterprise uses short-term Cash Credit funds for long-term purposes (e.g. machinery purchase, factory expansion, or funding unrecoverable bad debts). Because current assets cannot liquidate it, the CC debit balance never clears, causing persistent account irregularity.
Why do banks prefer carving out a WCTL rather than issuing warning notices?
Converting hardcore irregularity into a WCTL regularizes the revolving CC account, cures asset classification impairment, prevents NPA slippage, and locks the borrower into a disciplined monthly repayment schedule backed by cash flow.
Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
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