Working Capital Loan

Working capital loans are provided for stocking inventory and/or providing credit to maintain a healthy working capital cycle of a business. Working capital loans can be divided into two major categories, fund based and non-fund based. Fund based credit facilities such as cash credit facilities can be used by a business like cash for purchasing or stocking inventory and other items needed for operating the business. Non-fund based limits on the other hand are guarantees given by the bank based on the credit-worthiness of the borrower. Non-fund based limits such as Letter of Credit allows the borrower to purchase or stock inventory on credit terms from the supplier.

Cash Credit(CC)

Cash credit limit allows a business to utilize bank funds for acquiring stock or other assets required for running a business and/or for liquidating current liabilities of a business as it becomes due. Cash credit limit is similar to a credit card for individuals, wherein the bank allows the business to use a certain amount of funds in credit for working capital purposes. The amount of cash credit limit sanctioned is based on the business profile and credit worthiness of the borrower.

Overdraft (O.D)

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