Cash Credit

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Cash Credit



  • A cash credit loan is a short-term source of finance, having a tenure of up to one year. Under the short-term finance option, the bank offers its applicant to take a loan up to a certain limit depending on their credit history. This type of loan is extended to businesses and companies to fulfill their working capital requirement. This allows the customer, typically a business or company with a proven track record of profit, to withdraw money which is more than the balance available in their accounts. Cash credit is also known as Bank Overdraft facility. Leading banks, such as Janata Bank provides cash credit facility for businesses to finance their day-to-day requirement. The finance can be utilized for the purchase of raw materials, stores, fuel, for payment of wages for labor, power charges, for storing goods till they are sold out & for financing the sales by way of sundry debtors/receivables. Cash Credit facility is granted to companies to bridge the working capital gap, by way of a running account. The withdrawals are regulated and the withdrawal limit is arrived at based on the structure of current assets and liability. Cash Credit (CC) is granted against hypothecation of stock and assets such as raw materials, work-in-process, finished goods and stock-in-trade, including stores and spares.