"Unlocking Financial Flexibility: A Guide to Cash Credits"
Cash credit is a type of working capital loan in which money can be withdrawn against the hypothecation of stocks and receivables. Cash credit instantly helps businesses in overcoming the cash crunch situation during business tenure
How it Work
Cash credit permits an enterprise to withdraw money from a bank account. The money can be withdrawn a number of times until the total sanctioned limit is reached. The cash limit is defined by the lender as per the applicant’s profile, CIBIL score, and creditworthiness. These factors are based on the borrower’s company structure and its assets and liabilities.
Silent Features:
Cash credit is a short-term loan with a repayment period of 12 months
Interest rate charged by the lender is on the money withdrawn and not on the total sanctioned limit
Money can be withdrawn any number of times from the sanctioned limit
Cash credit is always offered against collateral or security
Higher limits can be availed by businesses with good credit scores and repayment history
