Cash Credit

What is Cash Credit:

Cash Credit (CC) is a short-term financing option that allows businesses to withdraw money from their bank account beyond the actual balance, up to a pre-approved limit. It’s mainly used for working capital needs and operates like an overdraft facility. Here’s what it does:

  1. Working Capital Support:

    • Cash credit helps businesses meet day-to-day expenses like payroll, rent, inventory purchases, etc., without facing cash flow issues.

  2. Withdraw Anytime:

    • The business can withdraw funds as needed, up to the approved credit limit, offering flexibility.

  3. Interest on Utilized Amount:

    • Interest is only charged on the amount of money used from the cash credit limit, not the entire limit.

  4. Collateral Requirement:

    • Typically, businesses need to provide collateral, such as inventory, receivables, or fixed assets, to secure the cash credit facility.

  5. Renewable Facility:

    • Cash credit is generally renewable annually, based on the business’s performance and financial position.

  6. Continuous Fund Availability:

    • Unlike term loans, there are no fixed repayments. The business can use and repay funds repeatedly, keeping the cash flow steady.

What Uttishtha Advisory Does:

Uttishtha Advisory is a consultancy firm offering a range of financial and business advisory services. Here’s what they do:

  1. Cash Credit Advisory:

    • Helps businesses understand and obtain cash credit facilities from banks.
    • Assists in preparing necessary documents and financials to apply for cash credit.
    • Provides strategies to manage cash flow efficiently using cash credit.

  2. Loan and Debt Solutions:

    • Guides businesses in securing various loans, including term loans and working capital loans.
    • Advises on restructuring debt to reduce interest burdens and improve repayment terms.

  3. Business Restructuring & Turnaround:

    • Helps companies in distress to restructure their operations and finances for better performance.
    • Offers advice on turnaround strategies to make businesses profitable again.

  4. Credit Rating Advisory:

    • Helps businesses improve their credit rating, which can lead to better borrowing terms.
    • Prepares businesses for interactions with credit rating agencies.

  5. Corporate and Legal Advisory:

    • Assists in legal compliance, corporate governance, and regulatory filings under the Companies Act and other laws.
    • Provides tax advisory services to ensure companies comply with GST and income tax regulations.

  6. Mergers & Acquisitions:

    • Advises on mergers, acquisitions, and other strategic business transactions.
    • Assists in identifying potential acquisition targets and negotiating deals.

  7. Valuation and TEV Studies:

    • Offers valuation services for businesses and assets, helping in transactions and investment decisions.
    • Conducts Techno-Economic Viability (TEV) studies to assess the feasibility of projects and assist lenders in making decisions.

  8. Distressed Asset Advisory:

    • Provides advisory services to companies facing financial difficulties, including under the Insolvency and Bankruptcy Code (IBC 2016).
    • Helps companies secure distressed asset funding and navigate bankruptcy proceedings…