Cash Credit Facility
It is commonly offered to businesses rather than to individual consumers. Financial institutions normally require the business customer to put down a form of security as collateral in exchange for cash. This security can be a tangible asset, such as stock, raw materials, or another commodity. The credit limit extended on the cash credit account is normally a percentage of the value of the collateralized security. Although it is a collateralized form of financing, cash credit is normally subject to credit approval.
Cash Credit facility (Working Capital) to the industry to finance day-to-day requirement. The working capital funds are generally required for purchase of raw materials, stores, fuel, for payment of labour, power charges, for storing finished goods till they are sold out & for financing the sales by way of sundry debtors / receivables. Cash Credit facility is granted to the customers to bridge working capital gap.
Cash Credit (CC) is granted against hypothecation of stock such as raw materials, work-in-process, finished goods and stock-in-trade, including stores and spares.
CC is granted by way of a running account, drawings to be regulated within the drawing limit permissible which is arrived at on the basis of composition of current assets and current liability based on the declaration in the stock statement in the prescribed format submitted by the borrower.
ELIGIBILITY OF BORROWER:-
- Proprietorship firm,
- Partnership firm,
- Private Ltd. Co./Public Ltd. Co./ LLP firm
PURPOSE OF LOAN:-
- Day to day working expense i.e. purchase of raw materials, stores, fuel, for payment of labour, power charges, for storing finished goods.
RATE OF INTEREST:-
- Rate of interest varies upon many circumstances however for generally industry practice it start from 8.00%-11.00%. Depends upon size of industry and collateral coverage and rating of firm/company.
LOAN CHARGES:-
- Processing Fees:- 0.10%-0.75% + GST
- Documentations Charges : – 0.25% hypothecation Charges
- Extra Charges i.e. CIBIL, Mortgage & Stamp Paper Charges
LIST OF DOCUMENTS:-
| List of Following Documents for Proprietorship Concern:- 1. Photo-4 2. Pan Card 3. Aadhar Card 4. Resident Light Bill 5. Office Light Bill 6. Business Proof i.e. Gumasta, GST, SSI 7. GST Return 8. 3 Years IT Returns with Computation and Audited 9. Balance sheet 10. 3 Years 26AS 11. 1 Year Bank Statement/Passbook Update 12. Loan Sanction Letter, if any | List of Following Documents for Partnership Firm/Company/LLP Firms:- A. Documents require of Partnership Firm/Company/LLP Firms:- 1. Pan Card 2. Office Light Bill 3. Partnership deed/MOA & AOA /LLP Deed 4. ROF/COI 5. Business Proof i.e. Gumasta, GST, SSI 6. Audited Balance Sheet with Income tax Return 7. 1 Year Bank Statements 8. Loan Sanction Letter, if any B. Documents require of Partner/Director 1. Photo-4 2. Pan Card 3. Aadhar Card 4. Resident Light Bill 5. Office Light Bill 6. Business Proof i.e. Gumasta, GST, SSI 7. GST Return 8. 3 Years IT Returns with Computation and Balance sheet 9. 3 Years 26AS 10. 1 Year Bank Statement/Passbook Update 11. Loan Sanction Letter, if any |
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