What is work order finance and who is it designed for?
Work Order Finance is a working capital solution designed for SMEs that receive work orders or tenders from government bodies, autonomous organizations, or large corporates but lack the upfront capital to execute them. Oxyzo finances the raw material procurement and operational costs required to fulfill the order, both at the pre-shipment and post-shipment stage. This allows SMEs to take on larger orders and grow revenue without being constrained by cash flow.
Is work order finance similar to purchase order finance?
Yes, work order finance and purchase order finance are similar in structure -- both are supply chain financing solutions providing working capital against documented orders. The key distinction is the order source: purchase finance typically covers raw material procurement from suppliers, while work order finance specifically supports executing formal work orders or tenders issued by government bodies, public sector units, or reputed private organizations. Both are offered by Oxyzo on unsecured, collateral-free terms.
Does Oxyzo offer collateral-free work order financing?
Yes, Oxyzo provides collateral-free work order finance to eligible SMEs. No land, property, bank guarantee, or other collateral is required for the unsecured variant. Eligibility is determined based on the business's turnover (minimum Rs 3 crores), business vintage (3+ years), and the credit assessment of the work order and the issuing organization.
What documents are required to apply for work order finance?
To apply for work order finance at Oxyzo, businesses need: KYC documents (PAN Card and Aadhaar), GSTIN, last 6 months of bank statements, GSTR details for the current financial year, audited financial statements for the previous 3 financial years, and a copy of the work order being financed. The application is completed entirely online.
What is the interest rate and maximum limit for work order finance?
Work order finance at Oxyzo starts from 12% per annum, with interest charged only on the amount actually used and for the duration of use. Processing fee starts from 1% per annum. The maximum credit limit is assessed case-by-case, depending on the size of the work order, the borrower's financial profile, and Oxyzo's credit comfort. Unsecured limits can go up to Rs 5 crores for eligible businesses.
How long does it take for work order finance to be disbursed?
After the credit line is approved and a valid work order copy is submitted, Oxyzo disburses funds within 24-48 hours. The approval process itself typically takes up to 48 hours, subject to document verification and credit assessment. The entire process is digital, with no branch visits needed.
Can government contractors and subcontractors use work order finance?
Yes, work order finance at Oxyzo is specifically designed for SMEs executing tenders from government bodies, autonomous organizations, public sector units (PSUs), and large private corporates. Both prime contractors and subcontractors who hold a valid work order from a recognized organization can apply. The work order copy is a key document in the application, as it serves as the underlying collateral for the credit facility and validates the business's revenue pipeline.
What is pre-shipment and post-shipment finance in the context of work order finance?
Pre-shipment finance covers the costs incurred before delivering goods or completing a work order -- such as procuring raw materials, paying for labor, or manufacturing expenses. Post-shipment finance (also known as bill discounting or invoice financing) covers the period after goods/services have been delivered but before the buyer has made payment. Oxyzo's work order finance supports both stages, ensuring SMEs have uninterrupted working capital throughout the entire order execution cycle.
What types of work orders does Oxyzo accept as eligible for financing?
Oxyzo accepts work orders from government departments, state and central PSUs, autonomous bodies (e.g., railways, defense, municipal corporations), and reputed private sector companies. The work order must be a formally documented, verifiable assignment with a defined scope and payment terms. Informal or unwritten purchase commitments are not eligible. The creditworthiness of the issuing organization is a key factor in Oxyzo's credit assessment, as it determines the reliability of eventual payment to the SME.
Can I apply for work order finance if I have multiple ongoing work orders simultaneously?
Yes, Oxyzo can structure a credit limit that covers multiple active work orders, subject to the aggregate value and the borrower's overall credit assessment. Each disbursement is triggered by submitting a specific work order copy, and multiple drawdowns can be live simultaneously under a single sanctioned facility. This makes the product ideal for SMEs with a portfolio of ongoing tenders, as it consolidates their working capital needs under one credit line instead of requiring separate loans for each order.
How does work order finance help SMEs grow their business?
Work order finance removes the single biggest barrier to SME growth in the B2G (business-to-government) and B2B space: the inability to accept large orders due to lack of upfront capital. By providing instant working capital against confirmed work orders, Oxyzo enables SMEs to bid for and execute larger contracts that would otherwise be out of reach. Over time, this builds the business's revenue track record, improves its credit profile, and creates a virtuous cycle of increasing order sizes and credit limits -- directly accelerating business scale-up.
