Case Study 2
Security and Facility Management company having Contracts in hand but insufficient working capital limits.
Executed Successfully in November 2024
Company Background:
The company is an MSME involved in Security and Facility Management Services in Mumbai, currently doing an annual revenue of around 40cr. The company has a 3cr working capital limit from State Bank of India, which is usually sufficient to manage their working capital requirements. They have been banking with the same bank for over 15 years now.
Requirement:
The company received a new contract for over 50cr. To execute the same, they needed an additional funding of Rs. 10cr. Their working capital bank agreed to enhance the limit by 3cr citing shortage of collateral and drawing power. This put the client in a 7cr shortfall failing which, they would not be able to successfully execute the contract, resulting in huge penalties and loss of business.
Capstone’s Solution:
Using facilities available to MSMEs under the Indian banking system, we arranged a bridge funding of 7cr for the customer. Not just that, we gave them a moratorium of the first 3 months EMI, allowing them to use the entire funds for working capital without worrying about making instalment payments. The company has started executing the contract successfully and is projecting a turnover growth of around 35cr in the next 12 months.
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Funding of 7cr given to an SME without any collateral
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The funding was given without disturbing the existing banking arrangements of the company
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The Drawing Power of the client was improved, allowing him to further increase his working capital limits in the future
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The process was time bound, with end to end execution done in 20 days including disbursement.
