Cash Credit/Constant Overdraft/LAP Overdraft (Fixed /Floating)

Cash Credit
Under Cash credit facility, a line of credit is provided to the borrower on the basis of his projected level of sales, inventories, receivables and cash requirements. This is also known as “Credit Limit” granted by the bank. This facility is operated in the same manner as overdraft facility.

Cash Credit/Constant Overdraft/LAP Overdraft (Fixed /Floating) is one of the product for Working Capital Finance.

Working Capital Finance

Each business has its own unique set of requirements so we have a dedicated team of experts who work with you to understand the specific nature of your business and structure solutions most suitable for you. We offer a complete bouquet of working capital facilities to help you manage your cash flow and ensure the smooth running of your business.

A working capital loan is a loan that has the purpose of financing the everyday operations of a company. Working capital loans are not used to buy long-term assets or investments and are instead used to cover accounts payable, wages, etc. Companies that have high seasonality or cyclical sales cycles usually rely on working capital loans to help with periods of reduced business activity.

Features and benefits:

  1. Quick and hassle-free process
  2. Customised and flexible financial solutions
  3. Customer-oriented services

Cash Credit Terminology

The cash credit facility is generally given for a period of 12 months and reviewed/revised end of the year. For limits below Rs.10 Cr generally banks give 20% of projected turnover as Cash Credit limit. The percent changes with the nature of the business.This advance is a secured finance available against some collateral security mortgaged.

In case of cash credit limit, the borrowing firm needs to submit stock, debtors and creditors statement monthly to the financing bank. But in case of overdraft facility and Loan against property overdraft (LAP OD) the borrower need not to submit stock, debtors and creditors statement monthly to the financing bank.

How can we help you?

Contact us at the BizFin Service office or submit a business inquiry online.