What is cash credit?

Cash credit is a financial product that allows businesses to borrow money on a short-term basis. It is a type of revolving credit, meaning that once the credit limit is established, the business can repeatedly borrow and repay the money as long as the account remains in good standing. Cash credit is typically used to cover short-term expenses such as inventory purchases, payroll, or unforeseen business expenses. The amount and terms of a cash credit account are established based on the creditworthiness and financial history of the borrower, as well as the business's ability to repay the debt. Interest rates on cash credit may be higher than other types of financing due to the short-term nature of the loan and the risk associated with lending money to businesses.