Cash Credit: A cash credit loan is a short-term, secured loan from a bank that provides businesses with a flexible line of credit to manage working capital needs, such as inventory or raw material purchases. It allows a business to withdraw funds up to a pre-approved limit, with interest charged only on the amount used, not the total limit. Cash credits are often used for day-to-day operational expenses and are similar to an overdraft facility, but are typically secured by collateral like current assets. A Cash Credit (CC) loan is a short-term working capital facility provided mainly to businesses to meet their day-to-day operational expenses. The bank sanctions a limit based on the borrower’s stock, receivables, or other current assets, which act as collateral. The borrower can withdraw funds multiple times up to the approved limit and pays interest only on the amount utilized, not on the full limit. This flexibility helps businesses manage cash flow fluctuations efficiently. The limit is reviewed periodically, and borrowers must submit regular stock and financial statements. Cash Credit loans support smooth business operations without waiting for customer payments.