Against Stock & Book Debts
Interest on Utilised Amount Only
Cash Credit, Sized Correctly Against Your Working Capital Cycle
Independent Cash Credit advisory from Inwealfoney. We prepare your CMA data, work out your Drawing Power, and negotiate margin and rate — so your limit actually matches your business cycle.
CC rates from
9.00% p.a.*
Limit up to
₹5 Cr+
What is cash credit
Working capital tied directly to your stock and receivables
Cash Credit (CC) is a revolving working-capital facility secured by hypothecation of stock, raw material, and book debts. You draw funds to run day-to-day operations — buying inventory, paying suppliers, bridging the gap until customers pay — and interest is charged only on what's drawn, not the sanctioned limit.
Primary Security
Hypothecation of Stock & Debtors
Raw material, work-in-progress, finished goods, and receivables under 90 days are hypothecated to the bank as running security — nothing is physically pledged or handed over.
Sizing Method
Turnover Method (Nayak Committee)
For MSE borrowers up to ₹5 crore, the limit is a simple formula: 20% of projected annual turnover from the bank, 5% brought in by you as margin.
Sizing Method
MPBF / Cash Budget Method
For larger or more complex working capital cycles, banks assess Maximum Permissible Bank Finance from detailed CMA data and projected cash flows.
CMA data preparation
We build bank-ready CMA data and working capital projections for you.
Right limit, right margin
We work backward from your actual stock/debtor cycle so you're not under- or over-sanctioned.
Multi-lender comparison
Your file is matched against several banks for the best rate, margin, and stock-audit terms.
Renewal & stock-statement support
We help keep your monthly stock statements and annual renewal on schedule.
Eligibility
Do you qualify? Here's what lenders actually check
How your limit is assessed depends mainly on its size — these are the core checks under each method in 2026.
- ✓Business vintage: 2–3 yearsEstablished trading, manufacturing, or service business with a track record.
- ✓Projected turnover eligible: up to ₹5 Cr (MSE)Nayak Committee norms apply to MSE borrowers up to ₹5 crore turnover; ₹2 crore for non-MSE.
- ✓Limit = min. 20% of projected turnoverThe bank finances at least 20%; you bring 5% of turnover as margin money.
- ✓CIBIL/CMR of promoters: 700+Business and promoter credit history are both reviewed.
- ✓2–3 years' ITR & provisional financialsSimplified documentation compared to the MPBF method — no detailed cash budget needed.
- ✓Business vintage: 3+ yearsAudited financials expected for larger, more complex working capital needs.
- ✓Detailed CMA data mandatoryCurrent assets, current liabilities, and 3–5 years of sales/profitability projections.
- ✓Financial ratios reviewedCurrent ratio, debt-equity, and other liquidity ratios factor into the sanctioned limit.
- ✓CIBIL/CMR of promoters: 700+Strong banking conduct on existing facilities carries significant weight.
- ✓Margin: 25–40% depending on sectorTrading businesses are typically margined higher than manufacturing/SSI units.
CC at a Glance
Limit range₹5 Lakh – ₹5 Cr+
Interest rate9% – 14% p.a.
Tenure12 months, renewable
Margin (secured)25% – 40% on stock/debtors
Stock statementMonthly, by the 10th
Your operative limit on any day is your Drawing Power — recalculated from your latest stock statement — not your full sanctioned limit.
Documentation
What you'll need to keep ready
Having these scanned and organised before you apply typically shaves days off sanction time.
KYC & Business Documents
- PAN & Aadhaar of all promoters/partners
- Business PAN & GST certificate
- Udyam/MSME registration
- Partnership deed / MOA & AOA / LLP agreement
Financial & CMA Documents
- Last 2–3 years' ITR with computation
- CA-certified / audited P&L and balance sheet
- CMA data with projected turnover
- Last 12 months' GST returns (GSTR-3B/1)
Bank Statements
- Last 12 months' current account statement(s)
- Statements from all operating banking relationships
- Existing CC/OD account statement, if any
Stock & Book Debts
- Latest monthly stock statement (format F8A or bank's own)
- Book debts / receivables ageing (≤90 days eligible)
- List of trade creditors
- Stock insurance policy covering hypothecated goods
Existing Credit Facilities
- Sanction letters of any running loans/CC/OD
- Latest CIBIL/CIR (company & promoters)
- NOC from existing lender, if switching banks
Business Continuity Proof
- Shop Act licence / factory or trade licence
- Rent agreement or ownership proof of premises
- Latest utility bill in business name
Note: A signed hypothecation agreement is executed at sanction, and monthly stock statements become an ongoing requirement — most banks also conduct a periodic stock audit once exposure crosses a threshold limit. We'll flag exactly what applies to your sanction.
Limit & Drawing Power Calculator
See how your CC limit is actually computed
Cash Credit doesn't have an EMI — it has two things instead: a sanctioned limit, and a Drawing Power that moves with your stock and debtors. Try both methods below.
₹50,00,000
₹40,00,000
₹20,00,000
₹15,00,000
25%
₹0
Drawing Power
Operative Limit
Blocked / Margin
Eligible Current Assets
₹0
Margin Locked
₹0
Operative Limit
₹0
Status
—
*Indicative only. Formula: DP = (Stock + Book Debts ≤90 days − Trade Creditors) × (1 − Margin%). Your operative limit on any day is the lower of DP and your sanctioned limit. Actual DP computation and eligible-asset definitions vary by lender.
₹2,00,00,000
Under the Nayak Committee (Turnover Method), total working capital is assessed at 25% of projected annual turnover — split as a minimum 20% bank finance and a minimum 5% borrower margin. Applies to MSE borrowers with turnover up to ₹5 crore.
₹0
Indicative CC Limit
Bank Finance (20%)
Your Margin (5%)
Total Working Capital
₹0
Bank Finance (Min. 20%)
₹0
Your Margin (Min. 5%)
₹0
Method Applicable
—
*Indicative only, per Nayak Committee norms (RBI-mandated minimum for MSE borrowers up to ₹5 crore turnover). Banks can sanction a higher limit if your working capital cycle justifies it; the formula gives the floor, not a cap.
How the Facility Actually Runs
01
Monthly stock statement
You declare stock and book debts by the 10th of every month; the bank recalculates your Drawing Power from it.
02
Draw within DP
You can withdraw up to your Drawing Power, even if it's lower than your sanctioned limit — exceeding DP flags the account as irregular.
03
Interest debited monthly
Interest is calculated daily on the utilised balance and typically debited at month-end — there's no fixed EMI.
04
Stock audit & annual renewal
Larger limits usually see a periodic stock audit, and the full facility is reviewed and renewed every 12 months.
FAQs
Common cash credit questions
The sanctioned limit is the maximum the bank has approved after credit appraisal, and stays fixed until formally revised. Drawing Power is the amount you can actually withdraw on a given date, computed from your latest stock statement. DP can be equal to or lower than the sanctioned limit — never higher — so it's DP, not the sanctioned figure, that governs your day-to-day access.
For MSE borrowers with projected turnover up to ₹5 crore, RBI mandates the simplified Turnover Method (Nayak Committee): the bank finances a minimum 20% of projected turnover, you contribute 5% as margin. Larger or more complex borrowers go through MPBF or the Cash Budget Method, which uses detailed CMA data and cash flow projections instead of a flat percentage.
If your outstanding balance exceeds your current Drawing Power, the account is classified as "out of order" or irregular. Banks typically flag this at the next stock statement or audit and may ask you to bring in funds to regularise the account before further drawings are allowed.
Not always. Banks typically make periodic stock audits mandatory once your exposure crosses an internal threshold limit, often auditing twice a year. Smaller CC accounts under the threshold may rely mainly on the monthly stock statement without a formal audit.
Yes. The hypothecated stock must be kept fully insured against fire and other risks, in the bank's favour, for the full value declared in your stock statement. If insurance isn't updated as stock grows, the uncovered portion can be excluded from your eligible stock value when the bank computes DP.
Cash Credit is a revolving limit tied to your current, ongoing stock and receivables — you draw and repay repeatedly. A Working Capital Term Loan is a one-time disbursement, usually to fund a permanent increase in working capital, repaid through fixed instalments over a set tenure like any term loan.
Expect a processing fee (roughly 0.5–1% of the limit) at sanction and renewal, stock audit charges where applicable, insurance premiums on hypothecated stock, and sometimes a small annual "share"/commitment charge on the limit. Ask for the full fee schedule before signing.
Let's size the right CC limit for your working capital cycle
Share your turnover, stock cycle, and current banking relationship — we'll prepare your CMA data and compare lenders on your behalf, no cost, no obligation.
Inwealfoney · Loan advisory services. Cash Credit limits, margins, rates and eligibility are indicative and subject to lender policy at the time of application.