CC LIMIT OR CASH CREDIT LIMIT
When you require working capital limit for your business, you have two options either to opt for overdraft facility or OD limit from bank or NBFC or to opt for CC limit from bank. Overdraft facility or OD limit can be provided by bank or NBFC but CC limit facility or cash credit limit provided by bank only. Primary security mortgaged by the bank or NBFC for overdraft facility is assets of the borrower but in CC limit primary security is stock and debtors of the company.
What is cash credit limit or CC limit?
Cash credit limit or CC limit is a kind of current account with cheque book facility. Cash credit limit or CC limit sanctioned by the bank to the small medium enterprises (SME) to fulfill their working capital requirements. CC limit holders offers stock and debtors as primary security to the bank. A CC limit or cash credit limit allows you to withdraw money or issue cheque up to the approved CC limit, even if there is no balance in the account. It is a short term credit facility generally for 12 month, which is renewable after every 12 months.
The cash credit limit loan in Delhi or CC limit is the maximum amount that you can overdraw from bank. However the drawing limit is specified by the bank. Borrower has to pay interest on utilized amount only, not on limit sanction. Interest is calculated on daily overdrawn balance and debited to the cash credit or CC account monthly.
Whatever amount you repay into the cash credit or CC account, you can withdraw it again as long as the limit is not over utilized. That’s why Cash credit limit or CC limit facility is also called revolving credit facility.
When do you need cash credit or CC limit?
CC Limit Fulfills Working Capital Requirement Of The Business: Cash credit limit loan in Delhi fulfills working capital requirement of the company. As a businessman you may buy goods on credit from supplier and supplier may offer credit period for payment but it is not feasible always to sale all the goods in given time. There may be some unsold stock and your money blocks in the stock.
Not only this but also, you may have to sale your goods on credit to your buyer and expecting timely payment from your debtors. But due to various reason and circumstances you may or might be not getting payment on time, due to all this you may face liquidity problem.
Due to liquidity problem, you may be not able to make payment of regular and fixed, business expenses on time like employee salary, commission, payment to your creditors etc. Supplier may stop supplying goods and worker may go on strike. This will not only affect your business but also cause a great loss to the company. This will also affect goodwill and reputation of the company.
To come out of this situation you can avail cash credit or CC limit from bank, so that you may not face working capital problem. Timely payment of your creditors and other business expenses gives you great mental satisfaction and helps you to run your business smoothly. This will also increase goodwill and reputation of the company.
CC Limit Used To Meet Unexpected Business Expenses: Business is full of uncertainty. As a businessman you have to make certain expenses for which you have not made any kind of provision. Expenses such as road accident, death of an employee, government policies, hike in rates, taxes and fees, strike etc. require a lot of money.
If you have Cash credit limit loan in Delhi or CC limit from bank, it will help you to meet all these unexpected business expenses on time and your business runs smoothly.
CC Limit A Great Tool For Seasonal Business: When a businessman manufacture or deals in a product which is seasonal like candle or light business, warm clothes business, etc. There is very less demand in off seasons. As there is no sale or very less sale, businessman may faces cash liquidity problem. Due to liquidity problem, you may be not able to pay your regular business expenses such as employee salary, payment to your suppliers etc. Supplier may stop supplying goods and worker may go on strike.
Cash credit limit or CC limit facility is a great tool to overcome with this problem because CC limit provides by the bank taking stock and debtors as primary security.
Who is Eligible for cash credit or CC limit?
Cash credit or CC limit is an agreement between borrower and the lender that regulates the term of cash credit or CC limit. All the bank have their own loan eligibility criteria but there are some common loan eligibility criteria which borrower has to fulfill to avail cash credit or CC limit from bank.
Following are some key important factors which would be checked by bank to accept or reject the cash credit or CC limit application:
- Age: At the time of cash credit or CC limit application, applicant must be 21 years or above but not more than 65 years.
- Business Continuity: Bank checks business continuity of borrower who is applying for cash credit or CC limit. A borrower should be in the business for the last three years to avail cash credit or CC limit.
- Nature Of The Business: Cash credit or CC limit offered by bank to trader and manufacturer only. It is because primary security for cash credit or CC limit is unsold stock and book debts or debtors.
- Cibil Score: A cash credit or CC limit borrower, who is having good cibil score will get quick loan from the bank. Cibil score is a decisioning factor for sanctioning or rejecting cash credit or CC limit application.
- Valid, Clear And Marketable Title Deeds Of Property: Generally bank needs additional security from the borrower. So, cash credit or CC limit borrower must be having valid, clear and marketable title deeds of entire chain of the property along with approved sanction plan or map. The ownership and physical possession of the property lies with the borrower only.
WHAT ARE THE DOCUMENTS REQUIRED FOR CASH CREDIT OR CC LIMIT?
Documents required for cash credit or CC limit depends upon the type of business of the borrower.
Documents required for different types of business are as follows:
Documents Required For Self Employed Non-Professional: Lenders further divided self employed non-professional into three categories i.e. Proprietorship Firm, Partnership Firm, and Private Limited or Limited company. As per the types of company document required for cash credit or CC limit are as follows:
- Cash Credit Or CC Limit Documents Required For Proprietorship Firm:
- Cash Credit Or CC Limit Documents Required For Partnership Firm
- Cash Credit Or CC Limit Documents Required For Pvt. Ltd. Company
WHAT IS THE RATE OF INTEREST OF CASH CREDIT OR CC LIMIT IN 2018?
Currently the rate of interest of cash credit or CC limit is based upon marginal cost of lending rate (MCLR) plus margin on the MCLR. Bank offers lowest or competitive rate of interest to attract prospective borrowers, due to stiff competition between banks.
The rate of interest on cash credit or CC limit varies in between 10% p.a. to 18% p.a. It is always advisable to compare cash credit or CC limit interest rates of different bank and chose the best one which suits your need.
You may take an expert advice of LOAN ON PHONE professional consultants who will help you to choose best bank who offers you lowest rate of interest on cash credit or CC limit with ZERO / nominal bank processing fees.
WHAT ARE THE OTHER KEY FACTORS TO BE CONSIDERED BEFORE CHOOSING BEST CASH CREDIT LIMIT OR CC LIMIT?
Before taking cash credit limit or CC limit it is advisable to consider following factors:
- CC Limit Loan Eligibility: Check your cash credit limit or CC limit eligibility, that how much CC limit loan you can borrow from bank. Generally CC limit amount is calculated by the bank as a percentage of sale and stock along with financial statements. For example a bank allowed cash credit limit up to 80% of stock plus 20% of sales or turnover of the business. CC limit eligibility of a borrower also depends upon so many other factors like age, income, cibil score, work profile, financial stability, market value of the property, loan to value (LTV) ratio etc.
- CC Limit Drawing Power: Drawing power is a limit up to which a company can withdraw from the working capital limit sanctioned. Drawing power is calculated after deducting margin from “Stock less creditors plus debtors”. Borrower has to submit monthly or quarterly stock and debtors statement to the bank and based upon that bank calculates drawing power of the company.
- CC Limit Rate Of Interest: Before taking cash credit limit or CC limit, check rate of interest offered by different bank or financial institutions. If rate of interest is high then interest is also high, so choose the bank which provides lower rate of interest so that CC limit interest will not put extra loads on your business.
- CC Limit Loan Processing Fees: Bank charges processing fees to process your cash credit limit or CC limit application. There are two types of charges one of them is loan processing fees and the other is cash credit account administration charges.Processing fee charged by the bank to process your CC limit loan application, valuation of the property and stock, legal verification of the property, residence verification, office verification, due-diligence of income documents and bank statement etc. It could be a fixed percentage of your loan amount or a fixed amount.Cash credit account administrations charges are taken by bank to maintain your CC account after disbursement. Some bank took upfront fees however some of them charged after sanction of the cash credit limit. So check CC limit processing charges of bank deeply before applying for the loan.
- CC Limit Foreclosure Charges: When borrower decided to close his cash credit limit or CC limit before the completion of loan tenure or period. Bank may levy 1% to 5% foreclosure charges on cash credit limit.If you apply through LOAN ON PHONE, our professional consultant will assist you in negotiating with the banks and may get ZERO foreclosure charges for you.
- Cash Credit Limit Or CC Limit Terms And Conditions: Bank laid down several conditions related to balance transfer of cash credit limit or CC limit to another lender, cheque bouncing charges, late payment charges, interest on late payment etc. It is advisable to read all the terms and conditions before choosing the best bank.
- Cash Credit Limit Or CC Limit Repayable On Demand At Any Time: As there is no EMI so there is no repayment, if limit is used within the specified limit. But cash credit limit or CC limit is repayable on demand by the bank at any time.
- No Minimum Monthly Payment Of CC Limit: As there is not any fixed EMI, so there is no minimum monthly payment required for CC limit subject to limit utilized within the specified limit. But if CC limit account goes into excess, you have to repay excess amount immediately. If the excess amount is not repaid immediately, bank may put debit freeze in the CC account and you have to pay full outstanding amount in a specified time. If bank recalls your cash credit limit or CC limit then it may affect your credit rating or cibil score adversely.
- CC Limit Penalty Interest Charges: When cash credit limit over utilized by the borrower and bank approves the overdrawn limit, then the interest charged on the excess amount is higher than the agreed CC limit rate of interest. This higher rate of interest is called penalty interest rate or charges.
WHO IS THE BEST CASH CREDIT LIMIT OR CC LIMIT PROVIDERS?
|BEST CC LIMIT PROVIDERS|
|Allahabad Bank CC Limit||HSBC Bank CC Limit|
|Andhra Bank CC Limit||ICICI Bank CC Limit|
|Axis Bank CC Limit||IDBI Bank CC Limit|
|Bank Of Baroda CC Limit||Indian Bank CC Limit|
|Bank Of India CC Limit||Indian Overseas Bank CC Limit|
|Bank Of Maharashtra CC Limit||IndusInd Bank CC Limit|
|Canara Bank CC Limit||Jammu & Kashmir Bank CC Limit|
|Central Bank Of India CC Limit||Karnataka Bank CC Limit|
|Citi Bank CC Limit||Kotak Mahindra Bank CC Limit|
|Corporation Bank CC Limit||Oriental Bank Of Commerce CC Limit|
|Dena Bank CC Limit||RBL Bank CC Limit|
|Deutsche Bank CC Limit||State Bank of India CC Limit|
|DHFL Dropline CC Limit||Standard Chartered Bank CC Limit|
|Federal Bank CC Limit||Tata Capital Dropline CC Limit|
|HDFC Bank CC Limit||Uco Bank CC Limit|
|Syndicate Bank CC Limit||Union Bank Of India CC Limit|
|Yes Bank CC Limit||Vijaya Bank CC Limit|
WHAT ARE THE DIFFERENCES BETWEEN CASH CREDIT LIMIT AND OVERDRAFT LIMIT?
Cash Credit account and overdraft Limit or OD account both are like a current account with a pre approved limit from which the account holder can withdraw the amount he requires. Borrower generally considered both are same but there are some difference in both the account which are as follows:
|Cash Credit Account||Overdraft Account|
|CC limit given by banks taking stock and debtors as primary securtiy. Bank may ask fixed assets of the borrower or company as additional security.||OD limit given by bank taking fixed assets as primary security.|
|Generally CC limit amount is calculated by the bank as a percentage of sale and stock along with financial statements. For example a bank allowed cash credit limit up to 80% of stock plus 20% of sales or turnover of the business.||OD limit amount is calculated on the basis of financial statement and market value of the property offered as a security.|
|Drawing power limit specified by the bank on monthly or quarterly basis.||There is no drawing power limit.|
|Stock & Debtors statement, GST return is required to be submitted to the bank on monthly or quarterly basis.||After approval financial statements are generally not required to be submitted to bank.|
|CC limit should be used for the business purposes only.||OD limit can be used for any purpose but not for speculation or illegal activity.|
|CC limit does not reduce over a period of time.||In case of drop down OD limit there is monthly reduction in amount of overdraft.|
|CC limit rate of interest is lower than OD limit.||OD limit interest rate is higher than CC limit.|
WHY I SHOULD TAKE CASH CREDIT LIMIT OR CC LIMIT FROM LOAN ON PHONE AND HOW DO WE HELP?
Today internet is the source of information and there is a lot of information available about the cash credit limit or CC limit on internet and we have also tried to give you some information about cash credit limit or CC limit but the most important question is that, Why I should take cash credit limit or CC limit from LOAN ON PHONE and how do we help you in choosing best cash credit limit or CC limit?
Almost all the banks or financial institutions claims to offer you the best deal. Most of the people confused with the various offers and deal, so we are here to help you to choose the best cash credit limit or CC limit.
About LOAN ON PHONELOAN ON PHONE is the one stop solution for all your financial needs. We are into this business for more than a decade. LOAN ON PHONE will analyze different loan offers and suggest you best deal on cash credit limit or CC limit with great customer services. Our expert provides best deal on wide range of products to the customer to take right decision.
Why Choose LOAN ON PHONE?LOAN ON PHONE knows that you have numerous options when it comes to procuring loans. For example, you could turn to a bank or NBFC (Non Banking Financial Corporation). In addition, the Internet is home to numerous lenders who want to reel you in. However, there’s no need to search any further. Here are the reasons LOAN ON PHONE is the only resource you’ll need.
LOAN ON PHONE Invested in Your SafetyIt’s easy to stumble upon fraudulent websites during your search for a suitable loan. Under the guise of reliable lenders, hackers will use infectious malware programs to obtain your private information. You’ll also have to keep your guard up for fake application pages. These pages will steal any personal sensitive information that you input.
There’s no need to take risks with your personal financial records. Skip those unsecure sites and work with us. LOAN ON PHONE features secure web pages that are free of malware infections. When you work with us, your information is safe.
LOAN ON PHONE Offers ChoicesWhen you use our services, you’ll have access to a large network of lenders without even leaving home. Alternatively, you can save your valuable time and money traveling to a physical loan lender. The smart choice is obvious. Give your feet a rest; stay home and work with us. You find the lender that seems best for you.
LOAN ON PHONE Works FastWe understand that when you’re applying for loan, you want the loan as soon as possible. For this reason, our request process is swift and hassle-free. If you have the required information handy, you can receive funds as soon as the next business day.
Don’t get caught up in delays and complicated requirements of other service provider. LOAN ON PHONE process is faster than working with any other service provider, so count on us for immediate emergency loan requirement.