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Cash Credit

A cash credit loan is short-term financing sanctioned by the bank and has usually had a tenure of up to one year. It is categorized under the Working Capital Loan. The bank sanctions a loan up to an agreed limit depending on the applicant's credit history. This allows the applicant to withdraw money which is more than the balance available in their accounts. The amount sanctioned depends upon the need of the funds, the existing current assets and current liabilities of the business, creditworthiness, repayment capacity, etc. Within the sanctioned limit, the business can withdraw any amount as per its requirement. The amount withdrawn under the cash credit loan is charged a rate of interest which is again decided based on the collateral offered, creditworthiness, etc. Cash credit loan is granted against hypothecation of stock and assets such as raw materials, finished goods, including stores and spares.


Business Vintage

Minimum of 3 years


Minimum 30 lakhs to Maximum of 15 CRS


Minimum 21 years, Maximum 70 years at the end of the loan tenure

Minimum Income

In the case of individuals, minimum income to be of 2.5 lakhs as per ITR for last 2 years. In the case of non-individuals, minimum cash profit should be Rs 3 lakhs for the last 2 years

Documents Required

  • Duly filled application form
  • Business plan
  • PAN card
  • Passport-sized photographs of the applicant
  • Identity Proof: Passport, Driving License, Voter’s ID card
  • Residence Proof: Voter’s ID card, Driving License, Passport, Ration Card, Telephone Bill
  • Income Proof: Last 6 months’ bank statement and last 3 years’ audited financial documents
  • Last 2 years’ ITR and current years’ GST returns
  • Business Proof: Incorporation and sales tax registration certificates, rent agreement,
  • Business address proof: Ownership proof, property papers, house tax document, electricity bill
  • Details of collateral or security to be submitted
  • Details of existing loans and their repayment schedule
  • Partnership deed and Memorandum of Articles (MoA)
  • Valid Trade Licenses
  • Certificate under Shop Establishment Act
  • GST registration certificate

Common Questions

Cash Credit Facility can be availed by Individuals, Professionals, Business Owners, Companies, Partnerships, Sole Proprietorships, Limited Liability Partnerships (LLPs), Co-operative Societies and Registered Trusts engaged in manufacturing, trading and services categorized under MSME.
You can use the money to meet your working capital requirements and for business expansion purposes.
Yes, collateral security of residential and commercial properties is required.
The cash credit limit is calculated based on the applicant's profile.
Yes, interest payments made are tax-deductible.

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