Cash Credit (CC) is a short-term working capital loan facility provided by banks to businesses. It allows companies to withdraw funds even when their account balance is zero, up to a sanctioned credit limit, for operational needs such as purchasing raw materials or managing payroll.

CC Limit: The credit limit is decided by the bank based on the financial health of the business, turnover, and collateral security. Borrowers can utilize the funds as needed within this sanctioned limit.

Interest Charges: Interest is charged only on the amount utilized from the CC account, not on the total limit. This makes it a cost-effective financing option for businesses.

Security & Collateral: Cash Credit is typically a secured facility, where the borrower pledges stock, receivables, or other business assets as collateral. Some banks may also ask for additional guarantees.

Renewal & Tenure: CC limits are generally sanctioned for one year and can be renewed annually based on performance and repayment history.