CC Limit Against Property?

A Cash Credit or CC limit against property is a type of short-term loan provided by banks to meet the working capital needs of businesses. The primary purpose is to provide businesses with the required funds to manage their day-to-day operations. It is a revolving credit facility, meaning you can withdraw, repay, and withdraw again within the approved limit.

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What is CC Against Property?

Here are some key points you must know:

• The CC limit is typically secured against the company's stock, debtors, or property. The property is mortgaged to the bank as collateral.

• Interest is charged only with the amount utilised, not on the entire limit. The interest is calculated daily and debited monthly from the CC account.

• The CC limit is usually sanctioned for 12 months and can be renewed annually based on the borrower's financial performance and repayment history.

• Both small and medium enterprises (SMEs) and large businesses can apply for a CC limit. The eligibility criteria may vary depending on the bank's policies.

• The CC limit provides flexibility in managing cash flow, as you can withdraw funds as needed and repay them when you have surplus cash.

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Hi there,

I am a finance student and I have often seen my friends being confused about the CC limit against property and the OD limit against property. While I understand that this confusion may reap up, I also want to tell you that there are many key differences between both. I’m just glad I ended up on this question through which I can make you understand clearly all that I have read and understood about CC limit against property and also hone my skills about the same.

When your firm requires a working capital limit, you have two options: an overdraft facility or OD limit from a bank or NBFC, or a CC limit from a bank. Banks and NBFCs can provide overdraft or OD limits, but only banks can provide CC limits or cash credit limits. The major security mortgaged by the bank or NBFC for an overdraft facility is the borrower's assets, whereas the key security for a CC limit is the company's stock and debtors.

A cash credit limit, often known as a CC limit, is a type of current account that includes a chequebook. Small medium companies (SMEs) are granted a cash credit limit, or CC limit, by the bank to meet their working capital needs. The bank accepts stock and debtors as principal security from CC limit holders. An SBI CC limit against property, also known as a cash credit limit, allows you to withdraw money or write checks up to the approved CC limit, even if the account has no balance. It is a 12-month short-term credit facility that is renewed after each 12-month period.

The cash credit limit loan in Delhi, also known as the CC limit, is the maximum amount you can withdraw from your bank account. The bank, on the other hand, sets the withdrawal limit. The borrower must pay interest only on the amount borrowed, not on the limit imposed. Interest is calculated daily and deducted from the cash credit or CC account on a monthly basis. You can withdraw whatever amount you repay into the cash credit or CC account as long as the limit is not exceeded. As a result, revolving credit is also known as cash credit limit or CC limit facility.

I hope now you have a clear understanding on CC limit against property and you will no longer get confused with OD limit against property.