Cash Credit (CC) Limit
Bridge your operating cycle with a flexible revolving credit line. Leverage your inventory, receivables, and raw materials to secure essential working capital, paying interest only on the funds you actually utilize.
- Interest calculated on daily debit balance
- Sanction limits up to 75% of stock and book debts value
- Seamless annual renewal and limit enhancement
Pay Only For Utilized Funds
Unlike term loans where interest accrues on the full sanction, Cash Credit charges you only on the actual amount drawn, drastically reducing interest costs.
Inventory & Debtors Valuation
Leverage your unsold raw materials, work-in-progress inventory, finished goods, and outstanding customer invoices (up to 90 days) to calculate drawing power.
Limit Enhancement
As your business sales and turnover grow, easily apply for a limit enhancement or top-up overdraft to match your expanding cash flow requirements.
Optimize Your Business Cash Flow Cycle
A Cash Credit (CC) limit is the financial backbone of trading, manufacturing, and service businesses in India. It is a running account that permits drawing of funds up to a set threshold to meet daily operational needs, purchase raw material, and clear supplier invoices.
At Crestpoint Venture, we specialize in helping businesses structure their balance sheets, analyze their Working Capital Gap (WCG), compile stock statements, and negotiate the lowest margins and commission rates with nationalized and private banks.
Drawing Power (DP) Assets:
- Raw Materials & Spares: Inventory stocks lying in factories, godowns, or warehouses.
- Book Debts / Receivables: Clean outstanding customer bills (generally aged less than 90 days).
- Work-In-Progress Stock: Semifilter products in the process of manufacturing.
Required Documents Checklist
How Cash Credit Limit Works
Follow the simple workflow to set up and manage your operational business limit.
Working Capital Gap Check
We analyze your trade credentials, debtors turnover, and stock holding period to establish your maximum limit potential.
Bank Appraisal & Technical Audit
Bank technical officers inspect stock levels, godown safety parameters, and review inventory books.
Drawing Power Formulation
Based on stock statements submitted monthly, your monthly drawing capacity (DP) is declared by the bank.
Running CC Operations
Draw cash, write checkbooks, perform RTGS/NEFT online, and clear supplier dues within the active limit.
Frequently Asked Questions
Cash Credit (CC) is a working capital facility secured primarily against current assets like inventory and debtors/receivables. Overdraft (OD) is a credit facility that can be secured against fixed deposits, properties, shares, or even be unsecured, and is generally more transactional and less tied to monthly stock audits.
Drawing Power is computed monthly as follows: (Paid Stock value - Margin) + (Eligible Debtors value - Margin). Bank margins are typically 25% for stock and 30-40% for debtors. Paid Stock represents total inventory minus sundry creditors. Eligible Debtors are unpaid invoices aged under 90 days.
While primary security is hypothecation of stock and book debts, offering collateral security (residential, commercial, or industrial properties) is highly recommended. Collateral helps secure higher limits, lower interest rates, and relaxed financial covenants.
A Cash Credit limit is typically sanctioned for 12 months. It undergoes an annual renewal process during which the bank reviews business sales turnover, audited balance sheets, and bank account operations to extend or enhance the limit.
Yes. Under the CGTMSE government credit scheme, eligible MSME manufacturing and trading units can secure collateral-free Cash Credit limits up to ₹5 Crores (and up to ₹10 Crores under new updates), subject to bank terms and credit parameters.
Get a Working Capital Assessment
Our senior credit managers will evaluate your inventory levels, debtor cycles, and sales turnover to calculate your optimum Cash Credit drawing limit. Contact us for a zero-cost consultation.
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