Frequently Asked Questions About Loans and Loan Assistance

A Cash Credit (CC) limit is a working capital facility for businesses. The bank sanctions a limit, usually against your stock and receivables, and you can withdraw and repay within it as often as you need, paying interest on the amount you use.

Drawing power is the amount you can actually withdraw from your CC limit at a given time. The bank works it out from your eligible stock and receivables, after deducting its margin, often 25% or more. If your drawing power is lower than the sanctioned limit, the lower figure applies.

No. Interest is usually charged on the amount you actually use, worked out on the daily balance. Some banks also charge for unused limits, renewals or late statements, so check your sanction letter.

Yes, for most CC limits. Banks usually want a stock and receivables statement every month. A late or incomplete statement can reduce your drawing power or attract a penalty.

Yes, if your turnover and working capital needs have grown. The bank reviews your latest financials, stock and account conduct before deciding on an enhancement. A well-run account with regular statements helps.