What is Cash Credit?

Cash Credit is one of the most widely used working capital facilities for businesses. It is a revolving credit limit sanctioned against the security of stock, raw material, finished goods and book debts (receivables), allowing a business to withdraw funds up to the sanctioned limit as and when required. Interest is charged only on the amount utilized and for the period it remains outstanding, making it a cost-efficient way to manage short-term cash flow gaps.

Businesses typically use a CC limit to purchase raw material, manage inventory, pay suppliers on time and bridge the gap between production/sales and actual realization of payments from customers.

How Cash Credit Benefits Your Business

• Meets day-to-day working capital requirements without repeated loan applications
• Interest charged only on the utilized amount, not the full sanctioned limit
• Renewable facility that grows with your business turnover
• Helps maintain smooth supplier payments and inventory levels
• Improves negotiating power with vendors through timely payments

Basic Eligibility for Cash Credit

• Business registered as a Proprietorship, Partnership, LLP or Company, operational for a minimum period
• Satisfactory banking track record and credit history
• Adequate stock, book debts or other acceptable security/collateral
• Positive cash flow and healthy turnover trend
• Proper financial statements (audited/provisional as applicable)

Loan Details

Documents Generally Required

• KYC of business and promoters
• Business registration / constitution documents
• Last 2–3 years' financial statements
• Bank statements (last 12 months)
• Stock and debtor statements