05 April 2010
Sir Please tell the difference between the term loan and cash credit and what is period for repayment of such type of loan?
If anyone what to set up its own industry in iron scrap melting industry then bank can give such loan to an individual without any balance sheet, but he having project report for it.
06 April 2010
Please tell the difference between the term loan and cash credit and what is period for repayment of such type of loan?
If anyone what to set up its own industry in iron scrap melting industry then bank can give such loan to an individual without any balance sheet, but he having project report for it.
06 April 2010
Term loan is generally taken for a long period and has the repayment in installments
However, CC limit is only for one year. It needs to renewed every year based on the financials.
If the fund is required for purchase of capital assets, then the bank gives the term loan.
If the fund is required for meeting the working capital requirement, then the bank gives the CC limit.
Project report / CMA data is essential for putting up the proposal. However, if the company is a new, the balance sheet may not be essential. However the bank may ask for the collateral security for such loan/cc limit.
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