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Cash Credit

A cash credit is an important type of working capital financing. The Limit is utilized for working capital requirements of the business. Assessment of Cash credit Limit is done taking into consideration the business cycle viz the stock level, credit period from creditors and credit period provided to customers.

In contrast with other traditional debt financing methods, the interest charged is only on the utilized amount of the cash credit account and not on the total borrowing limit. The drawing power is determined, based on the stock and book debts statements submitted by the borrower at monthly intervals Primary security for Cash credit is stocks and book debts.

Collateral Security may be any immovable properties, FD, LIC policies, etc. depending on the bank. Cash credit is typically given for a maximum period of 12 months, after which the drawing power is re- evaluated.

Documents Required for Cash Credit Facility

Sr. No Self Employed Individuals having
  Proprietorship Firm Partnership Firm Private Limited and Limited Company
KYC Documents
1 PAN Card PAN Card PAN Card
2 Aadhar Card Aadhar Card Aadhar Card
3 Current resident address proof Current resident address proof Current resident address proof
4 Office Address Proof Office Address Proof Office Address Proof
5 GST Registration Certificate GST Registration Certificate GST Registration Certificate
6   Partnership Deed MOA and AOA
7   List of partners and shareholding pattern onletter head List of Directors and Shareholding pattern on letter head
Income Documents
1 GST Returns – 1 Year GST Returns – 1 Year GST Returns – 1 Year
2 Income Tax Returns – 3 years Income Tax Returns – 3 years Income Tax Returns – 3 years
3 Bank Statement – 1 year Bank Statement – 1 year Bank Statement – 1 year
Additional Documents Generally Required
1 Existing loan – Sanction letter (if any) Existing loan – Sanction letter (if any) Existing loan – Sanction letter (if any)

Property Papers Required

Sr. No Document
1 Sale Agreement or Sale Deed with Registration Receipt, Stamp Duty, Index II
2 Chain of Agreement with Registration Receipt, Stamp Duty, Index II
This is required is there are resale transactions
3 Share Certificate
4 Occupancy Certificate ( OC )
5 Commence Certificate ( CC )
6 Approved Building Plans
7 Building Completion Certificate
8 Society Registration Certificate
9 Tax Paid Challan
10 Society Maintenance Receipt
Note: - As there are different properties types like residential, commercial, industrial, etc. Property documents required will always change based on type of property and location at which the property is located. We have just given the general list of property documents.
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