cash credit is offered to businesses to finance their working capital requirements. The businesses can buy raw materials, machinery or buildings. The cash credit account is very much similar to the current account. But current account allows overdraft facility occasionally whereas cash credit account is supposed to be overdrawn continuously.

The overdrawing limit will be set by the bank and the limit is sanctioned based on the working capital requirement of the company minus the margin.

Maximum Loan Amount	25.00 Lacks
Rate of Interest	@ 13%
Membership Shear Holding	@2.5% of Loan Amount in share if loan amount > Rs. 1.00 lack
Maximum Period	3 Year

Features and Benefits of Cash Credit Loans

• Cash credit is provided to a business so that it can take care of its working capital needs.
• This loan is offered as a short-term loan with a fixed repayment schedule. It can be a monthly or quarterly repayment schedule.
• The loan applicant will be required to provide a collateral or a security. The borrower can apply for the loan by getting certain assets such as raw materials, finished goods, or stock hypothecated.
• You will be required to pay interest only on the amount that you utilise and not on the loan that is approved.
• You can withdraw how much ever you want from the cash credit account depending on your requirements.
• One can apply for a cash credit loan against his or her fixed deposit in order to save on interest.
• Cash credit loans can be utilised by firms and companies to take care of their daily financial needs.
• The credit limit provided for cash credit loans is usually a proportion of the value of the security provided by the borrower.
• When the cash credit facility is offered, the applicant is entitled to draw funds with the help of a running account, by using a cheque book, which has to be provided by the lender in the name of the business entity or the firm.

Security for cash credit loans

A business entity can procure a cash credit loan only when it furnishes a security to secure the loan. This security can be submitted in the form of finished goods, work-in-progress goods, raw materials, stock-in-trade, spare products, and store products.