Structured Financing - A Strategic Approach to Capital

 

Structured Financing in India

In the corporate finance evolution, structured financing has become a very effective tool for Indian businesses. Particularly in the current dynamic economy, where conventional loans might not always be suitable to address the sophisticated funding requirements of businesses, structured finance comes to the rescue by offering tailor-made capital solutions.

Let’s understand what structured financing means, how it has developed globally and locally, and what types are most relevant for Indian businesses today.

Understanding Structured Finance

Structured finance refers to complex financial instruments designed to meet specific funding needs, particularly for large-scale borrowers or businesses with unique capital requirements. These solutions go beyond conventional debt and equity structures and often involve the pooling of assets, risk trenching, and credit enhancement mechanisms.

In India, structured finance is gaining popularity among companies seeking customized solutions that conventional banking products may not be able to provide. Whether it is the management of working capital shortfalls, debt refinancing, or expansion funding, structured finance offers the flexibility and size required in the current market.

Structured Financing Footprints

Structured finance found its roots across the world during the 1970s with the introduction of mortgage-backed securities (MBS) in America. Through this innovation, financial institutions could collect mortgage loans and transform them into tradable securities. As time passed, more complex products like collateralized debt obligations (CDOs) and asset-backed securities (ABS) came into force.

In India, the idea picked up significance during the early 2000s, mainly through securitization in housing finance. As years passed by and NBFCs, fintech's, and alternative platforms of investment gained prominence, structured finance instruments grew to cover such sectors as vehicle loans, SME financing, real estate funding, and infrastructure funding.

Why Structured Finance Matters for Indian Businesses?

Traditional bank financing is often limited by strict collateral requirements and standard repayment terms. Structured financing fills this gap by:

• Providing tailored repayment terms

• Mitigating risk through credit enhancements

• Releasing working capital by tapping asset value

• Mobilizing investments from institutional investors such as mutual funds, AIFs, and family offices

Through structured finance, essentially both liquidity and flexibility are introduced, allowing promoters to expand their operations without losing control.

Types of Structured Finance Applicable in the Indian Debt Market

1. Receivables Securitization

In this framework, future cash flows like loan repayment, rental incomes, or invoice receivables are bundled up and sold to investors. It is heavily utilized by NBFCs, housing finance institutions, and fintech lenders for accessing liquidity without shedding their core assets.

Example: An NBFC collects its auto loan receivables and sells them to a special purpose vehicle (SPV), which issues securities to institutional investors.

2. Lease Rental Discounting (LRD)

LRD is extensively utilized in real estate and commercial property finance. Here, the future rental income of a leased commercial property is discounted to advance an upfront loan to the owner of the property.

This product is favored by corporates and developers who wish to earn fixed rental income while retaining ownership of the asset.

3. Loan Against Future Cash Flows

For corporates with long-term contracts, such as EPC businesses, SaaS companies, or service companies, structured finance can provide loans against future earnings or receivables against milestones.

This structure optimizes working capital management while synchronizing repayment against actual inflows.

4. Structured Working Capital Finance

They exceed traditional overdrafts or CC limits. They are structured in alignment with the business's cash conversion cycle and include invoice discounting, vendor finance, and stock funding.

Usually, they involve the employment of hybrid debt forms consisting of term loans, revolving facilities, and credit enhancement for facilitating hassle-free business.

5. Subordinated Debt

This is a hybrid instrument that falls between senior debt and equity. It enables companies to raise capital without diluting ownership while paying fund houses more in terms of returns for taking higher risk.

It's particularly useful during the growth phase or acquisition, where the promoter does not want to dilute equity but still needs significant capital.

6. Credit-Enhanced Bonds

These are non-convertible debentures (NCDs) or other instruments issued with additional credit support, e.g., guarantees from third parties (e.g., banks or government schemes). This enhances the credit profile of the bond, which is attractive to institutional investors.

This structure is best suited for companies with moderate credit ratings who wish to access the debt capital market at competitive interest rates.

The Regulatory Landscape in India

Structured financing in India is regulated primarily by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). With evolving frameworks for securitization, NBFC funding, and bond issuance, the ecosystem is becoming more transparent and investor-friendly.

Moreover, government initiatives like credit guarantee schemes, the SIDBI Fund of Funds, and co-lending models are further boosting the adoption of structured finance products.

Conclusion:

As India's economy becomes more mature, so will its demand for sophisticated financing instruments. Structured financing is just no longer for big corporates, it's now available to mid-cap companies, startups, and even niche sectors like healthcare, infrastructure, and renewable energy.

At Terkar Capital, we collaborate with promoters and CFOs to craft tailored, structured financing solutions that suit their business objectives and risk tolerance. From cash flow mismatch management to raising non-dilutive capital, we offer profound market knowledge and robust institutional connections.

Business Term Loans: Transforming and Driving Growth

 

Business Term Loans

Over the past decade, Indian businesses across industries and scales have evolved at a remarkable pace. From mid-sized enterprises expanding into global markets to large manufacturers modernizing their supply chains, capital remains the single most critical lever for sustainable growth. Therefore, when it comes to structured funding with clarity on tenure and repayment, Business Term Loans have emerged as the preferred financing instrument.

Whether your business is planning capacity expansion, technological upgrades, infrastructure development, or even managing cash flow, term loans offer a dependable and customizable funding option. So, what exactly are Business Term Loans, and how can they power your next phase of growth?

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What Is a Business Term Loan?

At its core, a Business Term Loan is a debt facility extended to businesses for a fixed period ranging from a few months to several years with clearly defined repayment schedules. These loans are disbursed as a lump sum and are often used for purposes such as:

• Asset acquisition (machinery, intellectual property, equipment)

• Business expansion or diversification

• Working capital augmentation

• Debt consolidation or refinancing

• Technology upgrades

Unlike revolving credit facilities, term loans are structured with fixed interest rates or floating rates, along with consistent EMIs, helping businesses plan finances with precision.

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The Two Pillars: Short-Term vs Long-Term Business Loans

While both short-term and long-term business loans fall under the term loan umbrella, they serve distinct business needs and life cycles.

1. Short-Term Business Loans

Tenure Typically 12–24 months.
 

These loans are ideal for managing seasonal demand spikes, short-term operational costs, or bridging temporary cash flow mismatches. Companies in sectors like retail, logistics, trading, or FMCG often turn to short-term loans to remain agile.

Example Use Case: 

A garment exporter receiving a large order may need short-term capital to purchase raw materials and cover wage bills until export proceeds are realized.

Long-Term Business Loans

Tenure Ranges from 3 years to 15+ years.

Designed for capital-intensive goals like factory construction, real estate acquisition, or major equipment installation. Long-term loans offer structured repayment options aligned with the lifecycle of the asset or project.

Example Use Case: 

A manufacturing company investing in a new plant setup can avail a long-term loan to finance infrastructure, power supply, and advanced machinery installation.

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Why Business Term Loans Are Gaining Traction

Across industries, be it pharmaceuticals, infrastructure, IT services, automotive, or textile manufacturing, the preference for term loans is growing, and rightly so. Key advantages include:

• Helps in disciplined cash flow planning

• Funds can be tailored to diverse business needs

• Unsecured term loans are available for eligible borrowers

• Based on the scale and urgency of funding

Most importantly, they help businesses retain ownership while still accessing the funds needed for transformation and scaling.

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Industry Demand: Who Needs Business Term Loans?

Capital is the catalyst for operational continuity and strategic acceleration. That’s not just a philosophy, it’s a reality for sectors including:

• Hospitals and diagnostic centres are upgrading to cutting-edge tech

• Educational institutions are investing in hybrid classrooms and digital tools

• Renewable Energy: Solar power firms scaling operations in new geographies

• Agri-Tech & Food Processing: Cold storage, logistics, and farm automation

• Manufacturing Automation, compliance, and export-readiness initiatives
  
  

Each of these sectors requires timely and appropriately structured term loans to stay ahead of competition, adapt to policy changes, and respond to market demand.

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The Terkar Capital Advantage

Terkar Capital understands that every business has unique funding requirements. Therefore, with our deep domain expertise and access to a wide network of lenders, we offer end-to-end advisory services, from documentation to disbursal. Additionally, we provide tailored funding solutions structured to align with your specific business model and goals. 

Furthermore, we ensure fast turnaround times, recognising that timing can be crucial for business success. Finally, we offer both collateral and non-collateral options, ensuring accessibility for businesses of all sizes. Whether you're a startup, a conglomerate, or a legacy business, Terkar Capital can craft solutions that align your capital with your ambition.

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In Conclusion

Business Term Loans are not merely borrowed capital; they are strategic tools that, when structured correctly, can expand a business's capacity, empower innovation, and strengthen its competitiveness.

Further, as economic cycles fluctuate and business challenges evolve, having a dependable financial partner like Terkar Capital can be invaluable. From short-term liquidity support to long-term expansion planning, we help businesses secure capital with clarity, confidence, and credibility.

Know your Working Capital Cycle

 

As a business owner, your ability to execute can be measured by the number of working capital cycles you can complete. The higher the number of working capital cycles, the higher the churning, the lower the indirect cost (fixed cost may remain proportionate) and the lower the cost higher the margin levels.

One being the owner, hence, you need to push all the stakeholders in one direction where you can move the working capital cycle faster and better.

Accelerate Your Business Growth with Efficient Working Capital Management

Generally, the working capital cycle varies from industry to industry. The working capital cycle for the manufacturing and service industry may be around 30–90 days and for the trading industry, it may be for around a day only. So shorter the working capital, the better the churning of the funds and the better the churning, the higher the margin in the business.

Nowadays getting work orders may be easy but delivery on time is tough and may get tougher every day. And one of the many reasons for it is the working capital arrangement. Most of the time, instead of using your bank credit facility, your customer wants to use your credit facility with the bank. So keeping a close eye on working capital is one of the important parts of financial management.

Factors Impacting Your Working Capital

1) Convenient and clear Payment Terms

You should have a very clear understanding of the payment terms with your customer. Because you're also a customer for your suppliers. In a scenario, where you misunderstood your payment terms with your customer, it will not only impact your working capital cycle but also impact your supplier's working capital cycle. Your debtors will pay you late, so you may pay late to your suppliers.

2) Understand Your working capital supporters

Let's say you have a working capital limit of Rs. 5 cr from your banker and the available facility is getting exhausted with your existing work orders, then you should be very careful while taking the new orders. There are multiple ways to deal with this scenario.

a. First, you can ask your existing customers if they can pay you early. If yes, you can use these funds to procure the material for a new order.

b. Second, you can check with your existing bankers, if they can enhance your working capital limit (this may be time taking part).

c. Third, check with your creditors, if they can allow an extra credit period.

d. Fourth, You can also explore if you can get some advance (proportionate to your raw material purchase) for a new order and the remaining can be paid on a milestone basis.

3) Long-term association with all stakeholders

This is a very important aspect. Choose all the stakeholders wisely and stay with them for a long time. Including your raw material suppliers to your daily utility supplier. Over the period these suppliers/stakeholders know you and your business well.

And once they get confidence in you (as a promoter) and your business, these stake holders stand by your side in tough times. While raising the funds, we have seen many businesses rebuild their business only because their stakeholders supported them in the tough times.

4) Delivery Time

Two major factors are holding India to compete with China - Fast delivery time and economies of scale. Because of these two factors, Indian manufacturers are not able to sell at cheap. In most cases, the credit period starts after the delivery of the products.

So faster delivery will help you to cut down on your working capital. You can also understand this - because of good quality roads, there is a substantial increase in the last-mile delivery of the products. This will apply only to the manufacturing and trading

5) Short on Debtors and Long on Creditors

We don't suggest you squeeze your creditors, but you can always check if you can get an extended credit period from your suppliers. And faster payment from your Debtors.

6) Timely Payment

Keeping your word is always important. This should always remain your ethical obligation. You may ask your creditors for an extended time, but make sure, the payment should not be delayed by a day even. This helps you to gain the confidence of "Person of Words". This always helps to develop and maintain a smooth relationship with all your suppliers.

Conclusion

Effectively managing working capital is crucial for maintaining a healthy cash flow, optimizing margins, and ensuring the smooth operation of your business. By understanding key factors such as payment terms, stakeholder relationships, and timely deliveries, you can navigate the complexities of the working capital cycle management and position your business for sustained success.

At Terkar Capital, we specialize in helping businesses facilitate working capital solutions tailored to unique needs. Our expertise and customized approach ensure that you have the financial support necessary to thrive in today's competitive market. So, Let Terkar Capital work with you in achieving optimal working capital cycle management and propel your business growth.

Follow Terkar Capital on Linkedin!!

Master Working Capital Cycle Management for Business Success

 

Introduction to Working Capital Cycle Management

As a business owner, strategic working capital cycle management is crucial. Your ability to effectively navigate multiple working capital cycles demonstrates your execution power. The more working capital cycles you can complete, the higher the churn, leading to lower indirect costs (with fixed costs remaining proportional) and increased margins.

To achieve this, it is essential to align all stakeholders towards the common goal of accelerating and optimizing the working capital cycle. By doing so, you can enhance efficiency, reduce costs, and boost profitability.

Understanding the Working Capital Cycle

Generally, the working capital cycle varies from industry to industry.  For the manufacturing and service industry may be around 30-90 days; for the trading industry, it may be around a day only. So shorter the working capital better the churning of the funds and the churning higher the margin in the business.

Explore the working capital cycle in service business here

Nowadays getting work orders may be easy but delivery on time is tough and may get tougher every day. And one of the many reasons for it is the working capital arrangement. Most of the time, instead of using your bank credit facility, your customer wants to use your credit facility with the bank. So, keeping a close eye on working capital is one of the important parts of financial management.

Learn Effective Management of Working Capital Cycle from the Insights, here.

Factors impacting your working capital

1) Convenient and clear Payment Terms

You should have a very clear understanding of the payment terms with your customers because you’re also a customer of your suppliers.

In a scenario, where you misunderstood your payment terms with your customer, it will not only impact your working capital cycle but also impact your supplier’s working capital cycle. Your debtors will pay you late, so you may pay late to your suppliers.

2) Long-term association with all stakeholders

This is a very important aspect. Choose all the stakeholders wisely and stay with them for a long time. Including your raw material suppliers to your daily utility supplier.

Over the period these suppliers/stakeholders know you and your business well. And once they get confidence in you (as a promoter) and your business, these stakeholders stand by your side in tough times.  While raising the funds, we have seen many businesses rebuild their business only because their stakeholders supported them in the tough times.

3) Delivery Time

India has two major reasons to compete with China – faster delivery time and economies of scale. Due to these two factors, Indian manufacturers cannot sell cheaply. In most cases, the credit period starts after the delivery of the products. So faster delivery will help you reduce your working capital.

You can also understand that – due to better road quality, there has been a significant increase in the last-mile delivery of products. This will be applicable only for manufacturing and trading

Learn the working capital cycle for manufacturing business, Here.

4) Short on Debtors and Long on Creditors -

We’re not suggesting you squeeze your creditors, but you can always check if you can get an extended credit period from your suppliers. and faster payment from your creditors.

5) Timely Payment

Keeping your word is always important. This should always be your moral obligation. You can ask your borrowers for an extension, but ensure the payment is not delayed by a day.

This helps you gain the confidence of a “person of words”. This helps in developing and maintaining smooth relationships with all your suppliers.

Apply for Working Capital Finance at ease, Here.

Understand Your Working Capital Supporters

Let’s say you have a working capital limit of Rs. 5 cr from your banker and the available facility is getting exhausted with your existing work orders, then you should be very careful while taking the new orders. There are multiple ways to deal with this scenario.

●     First, you can ask your existing customers if they can pay you early. If yes, you can use these funds to procure the material for a new order.

●     Second, you can check with your existing bankers if they can enhance your working capital limit (this may be a time-consuming part).

●     Third, check with your creditors, if they can allow an extra credit period.

●     Fourth, You can also explore if you can get some advance (proportionate to your raw material purchase) for a new order and the remaining can be paid on a milestone basis.

Many other factors need to be considered – some of which are industry-specific and some of which are company-specific. But you should know your working capital cycle well set some rules and follow them.

Unleash business potential with Unsecured Working Capital at Ease.

Conclusion

Effectively managing working capital is crucial for maintaining a healthy cash flow, optimizing margins, and ensuring the smooth operation of your business. By understanding key factors such as payment terms, stakeholder relationships, and timely deliveries, you can navigate the complexities of working capital cycle management and position your business for sustained success.

At Terkar Capital, we specialize in helping businesses facilitate working capital solutions tailored to unique needs. Our expertise and customized approach ensure that you have the financial support necessary to thrive in today’s competitive market. So, Let Terkar Capital work with you in achieving optimal working capital cycle management and propel your business growth.

 

Achieving business growth is a common aspiration, but purchasing the necessary machinery to support that growth can be financially challenging. Conventional loans often demand collateral, which puts your business assets at risk. However, an innovative solution exists which is machinery loans without security. 

This financing option caters to businesses like yours, providing access to equipment needed for expansion without collateral.

Understanding Machinery Loans Without Security

Unlike secured loans, which require you to pledge assets like property or equipment as collateral, unsecured machinery loans rely solely on your business's creditworthiness. This eliminates the risk of losing valuable assets if you encounter financial difficulties.

Discover how Machinery Loans help in Business Growth.

The Power of Machinery Loans without Security for Businesses

Machinery Loans without security are a game-changer for businesses of all sizes and types. It allows you to:

• Get the necessary equipment without disturbing the existing property

• Enjoy a faster approval process

• Invest in a wider range of machinery 

• Seize growth opportunities

• Secure financing for future endeavours 

Why Choose Machinery Loans without Security?

The advantages of unsecured machinery loans are undeniable:

• No Collateral Risk

• Turnaround time is about 3-4 days.

• Flexible Financing

• Preserved Assets

• Tenure varies from 3 to 5 years.

• Improved Cash Flow

Learn How Machinery Loan Refinancing Can Fuel Business Growth.

Eligibility and Requirements

While unsecured loans offer greater flexibility, lenders still have eligibility criteria. Here's what you can expect:

• Should be above 21 years of age

• Business vintage of 3 years or more

• A healthy track record and positive financials are crucial.

• A good CIBIL (Above 720)

Machinery Loans without Security at Terkar Capital

At Terkar Capital, we understand the importance of streamlined and hassle-free financing to drive business growth. We collaborate with corporates to facilitate fund acquisition through various debt instruments including machinery loans without security. 

Our primary objective is to assess your business growth potential and creditworthiness, to expedite the loan approval process. We are dedicated to helping clients acquire the needed machinery to meet their specific requirements, fueling their growth and expansion aspirations.

Conclusion

Unsecured machinery loans offer a powerful and accessible path to growth for businesses of all sizes. By freeing up your valuable assets, streamlining the funding process, and providing flexibility in equipment financing, these loans empower you to invest in your future.

Remember, a well-informed decision is key. So, carefully assess your needs, compare loan offers and choose a lender that matches your goals. With the right financing, you can unlock new possibilities and drive your business to lasting success.

So, don't let a lack of collateral hold you back. Explore the potential of unsecured machinery loans and watch your business thrive!