In this fast-paced world, life doesn’t always go as planned. Imagine needing quick financial assistance during situations like medical or urgent home renovations. This is where most people opt for cash credit loans to get secure, quick and flexible funding without going through lengthy paperwork and avoiding delays.
In this article, we’ll discuss cash credit loans, their features, and steps to apply to help you understand how platforms like Stashfin credit line can provide you with an instant and hassle-free credit experience.
What is a Cash Credit Loan?
Cash credit loans are short-term loans offered by financial institutions to cover day-to-day expenses for the smooth running of businesses. They allow businesses to borrow funds up to a certain amount based on their financial standing.
In these, borrowers can withdraw the amount anytime within the specified limit and are charged interest on the same. This loan type is helpful for small businesses to manage their cash flow and operational expenses as it is a flexible and convenient financial tool.
Features of Cash Credit Loans
To know more about these loans, here are some of its features:
- Short-Term Loan: Just like instant credit lines, cash credit loans are designed for short-term needs and financially assist borrowers.
- Interest Rate: The interest rate is an added cost of borrowing money, and in cash credit loans, it is usually charged on the amount withdrawn and used.
- Collateral: Cash credit loans are secured loans that require borrowers to pledge an asset, such as inventory raw materials or other movables, as security.
- Credit Limit: The credit limit generally depends on the borrower’s creditworthiness or borrowing capacity.
- Repayment Tenure: In cash credit loans, the repayment period is generally considered up to 12 months and can be repaid mostly in monthly installments.
Eligibility Criteria and Documents Required
To apply for a cash credit loan, you must meet certain criteria:
- Age: Although it may vary, lenders mainly consider a borrower with a minimum age of 25.
- Business History: Most lenders require that the business must have been operating for at least 2-3 years.
- Credit History: The business must have a good credit profile to assure lenders that you can repay the loan on time.
- Collateral: Borrowers must keep an asset as collateral, such as inventory, equipment or raw material.
- Revenue and Cash Flow: Businesses’ revenue and cash flow are generally considered by lenders when determining eligibility.
Here are some of the basic documents needed when applying for cash credit loans:
- Identity Proof: A government-issued photo identification and address proof such as utility bills.
- Business Proof: GST certificate, PAN card or licence.
- Bank Statements: Latest statements of the main operating account.
- Financial Statements: Balance sheet, tax returns and profit and loss statements
- Collateral Documents: Evidence related to collateral, such as property deeds or proof of ownership.
How to Apply for Cash Credit Loans?
Application for cash credit loans is quite the same as applying for an instant credit line online. Follow the below steps:
- Choose a trusted lender offering cash credit loans.
- Check eligibility criteria and documents that are required for the application.
- Apply online via the lender’s website, provide all the details and upload the necessary documents.
- Submit the application, and the lender will verify your details and creditworthiness.
- Once verified, you’ll receive the credit limit, and you can withdraw within the specified limit.
Conclusion
Cash credit loans offer assistance to business owners when they need money instantly to carry out their smooth operations. They can also consider Stashfin’s credit line, which offers loans of up to ₹5,00,000 at competitive rates with the benefit of flexible repayment tenure and up to 30 days of interest-free period.
It is always advisable to read the terms and conditions carefully before deciding to make the most of the loans.
