Orders grew. The limit didn't.

Eighteen years of precision. Same bank. Same ₹5 crore CC line.

For a northern industrial-cluster manufacturer of sheet-metal and fabricated components - supplying switchgear and material-handling OEMs - the relationship had worked fine. Until it didn't.

A large OEM approval landed on the table. The order pipeline nearly doubled overnight. There was just one problem: the money to execute it.

Steel and zinc procurement had to be paid in 30–45 days. OEM receivables took 75–90. That opened a net operating cycle close to 95 days.

The ₹5 crore CC was fully drawn by mid-month. Every month. The promoter was stretching creditors, dipping into a 26% informal credit line just to keep the furnace running.

And the new orders? Being politely declined.

The books told a different story than the balance sheet did. Stock sitting for 55 days. Debtors taking 82. Suppliers giving just 35 days of grace.

That gap - the real working-capital hole - was nowhere near what a ₹5 crore limit could cover.

Under the Nayak turnover method, 20% of a projected ₹60 crore turnover justified ₹12 crore in fund-based limit. Actual assessed need: ~₹9 crore. Current ratio 1.28. TOL/TNW 2.6 - serviceable, not stressed.

The problem wasn't discipline. Drawing power was consistently ahead of the limit. The limit had simply never been re-based to where the business actually was.

The answer: CC enhancement from ₹5 crore → ₹9 crore. Stock margin at 25%, book-debt margin at 40%, with debtors up to 90 days eligible.

To bridge the collateral gap, the promoter's commercial plot was added as security - taking cover to ~1.3x. Pricing came in at repo + ~3.0% (≈8.25–8.5%).

And we stayed with the incumbent public sector bank, under its MSME cluster scheme. Ten years of clean conduct and the bank's hybrid-security appetite made an enhancement cheaper and faster than switching lenders.

We rebuilt the CMA with realistic 3-year projections and cleaned up a sundry-creditor classification that had been suppressing drawing power. Collateral valuation and legal search were commissioned in parallel.

The credit committee flagged debtor concentration on one OEM. We addressed it with the OEM's rating and proposed a bill-discounting sub-limit against those invoices.

From sanction to disbursement: seven weeks - including fresh ROC charge modification and the collateral mortgage.

Eighteen months later:

Turnover grew to ~₹68 crore. Capacity utilisation climbed from ~70% to ~88%. The 26% informal line was retired entirely - saving an estimated ₹35–40 lakh a year in interest.

Steel suppliers, now paid promptly, offered early-payment discounts that recovered part of the finance cost. The account's external rating improved at renewal.