India Family Business Consulting

Ramesh had built his manufacturing unit over 15 years.
Solid orders. Loyal clients. A reputation that took a decade to earn.

When a chance came to buy a new CNC machine for ₹50 lakhs, he didn’t hesitate. The numbers made sense. The capacity would double. The future looked clear.
He paid from his working capital. Account drained. Asset acquired. Felt like a smart move.

Four months later, three large orders landed together.
Ramesh went to the bank.
The relationship manager looked at the balance sheet, then looked up.
“Ramesh ji, you have a capital asset on your books. But no term loan against it. You funded it from working capital. We cannot extend additional working capital for an asset you have already paid for from operations.”

Ramesh stared at him.
The orders were real. The machine was running. The business was profitable.
But the bank’s door was shut.

He didn’t lose the business to competition. He didn’t lose it to a bad product or a difficult market.
He lost his footing on the day he made what felt like a confident decision.

Here is what Ramesh didn’t know then:
A term loan would have covered 70–80% of that machine. His working capital would have stayed untouched. And the bank would have happily funded his operations when the orders came.

Two facilities. Two purposes. Both available if the funding had been structured right.

Instead, one pool of money was used for everything. And when it mattered most, there was nothing left to draw from.

Banks don’t fund decisions already made with your own money. They fund structured proposals where the right money is in the right place.
The machine didn’t kill Ramesh’s momentum. The funding sequence did.

If you run an SME, ask yourself one question today Are you funding long-term assets from short-term cash?
Because the crisis that follows never announces itself. It just arrives on the day your best opportunity shows up.

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