Cash Credit / Overdraft / Dropline Overdraft

Businesses need regular cash inflows to take care of their day-to-day operations. If the working capital requirements are not properly met for a business, it could severely affect its smooth business operations. Cash Credit, Overdraft & Dropline overdraft facility fulfill the financial commitment with quick and you pay interest only on the utilized loan amount together with a credit protection plan.

Cash Credit

Cash Credit, commonly known in short as CC, is a facility of a short-term loan under which the borrower can withdraw funds in excess of his credit balance as per his requirements and business needs. Under this type of finance, the lender offers the borrower a certain specified limit (called ‘cash credit limit’) up to which the borrower can withdraw from the cash credit account. The borrower obtains the loan by pledging/hypothecating its collateral security.

Overdraft

A bank overdraft is a facility extended by a bank to corporates and other clients to withdraw funds from their account in excess of the balance. This facility is provided by the bank for a fee and/or interest is charged on the excess amount that is withdrawn for the length of the time. It allows the facility holder to withdraw money from the account despite having no balance. There is a limit on the amount that can be overdrawn from the account. The overdraft limit is usually set by the bank basis the amount of working capital, creditworthiness of borrower and security offered by borrower.

Dropline Overdraft

Dropline Overdraft Loan can be a secured or unsecured loan against a property which is evaluated for the repayment ability and the loan amount is reduced frequently while the ownership of the property remains with the individual only.

Dropline overdraft is a facility provided to customers where they can overdraw from their current account up to an agreed limit. Overdraft is an effective way of borrowing as customers pay interest only for the period of utilization, another advantage of availing overdraft is that they can deposit the amount or withdraw whenever they wish to by not exceeding the limit.

Credit /Overdraft / Dropline Overdraft Benefits & Features of Cash
  • They come as secured and unsecured loan
  • Secured loan is provided with a collateral and Unsecured loan based on Creditworthiness of the individual
  • Monthly repayments are not required like traditional loans.
  • Interest will be charged only on the amount utilized by borrower and charged at the end of the day as per the closing balance
  • Compared to rates of personal loan or term loan, their rates of interest is very low.
  • Good for businesses where there is a requirement of day to day working capital
  • Withdrawals on a cash credit account can be made many times, up to the borrowing limit, and deposits of excess cash into the account lower the burden of interest that a company faces.
  • Interest payments made are tax-deductible and, thus, reduce the overall tax burden on the company.

Who Can Apply For Cash Credit / Overdraft / Dropline Overdraft
  • Businessperson owning a proprietorship, partnership, or private limited company, and a current account with good transaction history with the bank
  • Number of years in a business and having maintained a current account
  • Business should be operational for more than three years and have a clean track record.
  • Banks may also seek for income tax returns with audited balance sheet, profit and loss accounts to facilitate overdraft limit
EMI Calculator

You can use the EMI Calculator to calculate your monthly installments way before you apply for a loan and have a definite estimate of your monthly payments well in advance.

Documentation Required for Cash Credit / Overdraft / Dropline Overdraft

Following are the documents you would need to submit for all applicants / co-applicants for the loan approval

Self-employed individual

Sole Proprietorship Pvt. Ltd. Partnership
KYC - Applicant & Co-Applicants
Photograph of Applicant & Co-applicants Photograph of Applicant & Co-applicants Photograph of Applicant & Co-applicants
Identity proof of Applicant & Co-applicants Pan card of the company Pan card of the company
Address proof of Applicant & Co-applicants List of directors on shareholding pattern-certified by CA Partnership Deed
Business vintage proof Business vintage proof Business vintage proof
GST registration GST registration GST registration
Article of Association and Memorandum of the company Identity proof of all partners
Identity proof of all directors Address proof of all partners
Address proof of all directors
Income Proof - Certified by CA
Last 3 years Financials - Attested By Proprietor/Director/Partner
Income Tax Return Income Tax Return Income Tax Return
Computation of Income Computation of Income Computation of Income
Balance Sheet Balance Sheet Balance Sheet
Profit & Loss Profit & Loss Profit & Loss
Creditors & Debtors Creditors & Debtors Creditors & Debtors
Complete all Audit Report All Director's Report Complete all Audit Report
  Complete all Audit Report
 
26 AS 26 AS 26 AS
GSTR-3B (updated one year)* GSTR-3B (updated one year)* GSTR-3B (updated one year)*
One year Bank Statement of Saving & Current accounts One year Bank Statement of current accounts One year Bank Statement of current accounts
(In PDF Format) (In PDF Format) (In PDF Format)
All Directors All Partners
Income Tax Return Income Tax Return
Computation of Income Computation of Income
26 AS 26 AS
One year Bank Statement of Saving accounts One year Bank Statement of Saving accounts
(In PDF Format) (In PDF Format)
Other Documents
Current loan SOA if any
Ownership Proof *

All documents to be self attested. The above list is indicative in nature and additional documents can be asked for.

For quick apply to send all documents in PDF format to our email info@positiveally.in

Reasons to Avail Cash Credit / Overdraft / Dropline Overdraft with Posiitive Ally
  • Connected with top Private banks and NBFCs, which helps you to get market’s most attractive & affordable loan.
  • Enjoy the hassle-free experience with minimal documentation, doorstep document pick up at your desired location.
  • Provide pre-loan & post loan support with advisory services.
  • Quick turnaround time and complete secure process.