Other Loans

Cash Credit Loan

Cash credit is a short-term loan facility provided by banks to businesses to meet their working capital requirements. It allows businesses to withdraw funds up to a pre-approved limit as needed, and interest is charged only on the utilized amount. Cash credit facilities are typically secured by collateral, such as inventory or receivables, and are suitable for businesses with consistent cash flow needs.

1. Basic Eligibility

Typically between 18 to 80 years (at the time of loan maturity)

Minimum 2-3 years of operation.

Good credit history and CIBIL score (685+)

Sole proprietorship, partnership, private limited company, Limited Liability
Companies etc.

2. Benefits

Withdraw funds as needed up to a pre-approved limit.

Pay interest only on the amount used, not the entire limit.

Manage cash flow better by having funds available when needed.

Fast processing and approval for urgent needs.

Withdraw and repay multiple times within the credit period.

Pay interest only on the utilized amount.

3. Key Factors of a Term Loan

The margin rate for cash credit loans ranges from 10% to 25% of the sanctioned limit.

Cash credit loans are usually required to be repaid within a year or less, and the interest is payable only on the amount used/withdrawn and not the entire borrowing limit.

Primary security of stock and book debts required along with property collateral.

Cash credit loans typically have a repayment period of up to 12 months,
which can be renewed annually.