Bank cc loan eligible
This query is : Resolved
25 March 2021
A small business person projected turnover details mentioned below as on 31-03-21.
Sundry creditors :2,00,000/-
Sunday debtors :1,50,000/-
Closing stock Rs:3,00,000/-
Capital Rs:3,00,000/-
Cash on hand Rs:50,000/-
Projected sales turnover Rs:30,00,000/-
Question:
A person how much cc loan eligible from bank for turnover based.
Sundry creditors :2,00,000/-
Sunday debtors :1,50,000/-
Closing stock Rs:3,00,000/-
Capital Rs:3,00,000/-
Cash on hand Rs:50,000/-
Projected sales turnover Rs:30,00,000/-
Question:
A person how much cc loan eligible from bank for turnover based.
12 July 2024
To determine the CC (Cash Credit) loan eligibility from a bank based on projected turnover and other financial details provided, we need to calculate the working capital requirement. Generally, banks provide CC limits based on a certain percentage of the projected turnover.
### Steps to Calculate CC Loan Eligibility:
1. **Calculate Working Capital Requirement (WCR)**:
- Working Capital = Current Assets - Current Liabilities
- From the details provided:
- Current Assets:
- Sundry Debtors: Rs 1,50,000
- Closing Stock: Rs 3,00,000
- Cash on Hand: Rs 50,000
- Total Current Assets = Rs 5,00,000
- Current Liabilities:
- Sundry Creditors: Rs 2,00,000
- Total Current Liabilities = Rs 2,00,000
- Working Capital = Rs 3,00,000
2. **Projected Sales Turnover**:
- Projected Sales Turnover = Rs 30,00,000
3. **CC Limit Calculation**:
- Banks typically provide CC limits based on a percentage of the projected annual turnover. This percentage varies and can range from 20% to 80% depending on the bank's policies, the industry, and the financial health of the business.
4. **Example Calculation**:
- If the bank offers a CC limit of 20% of projected turnover:
- CC Limit = 20% of Rs 30,00,000
- CC Limit = Rs 6,00,000
### Conclusion:
Based on the projected turnover of Rs 30,00,000 and assuming a conservative CC limit of 20% of turnover, the small business person would be eligible for a Cash Credit (CC) loan of approximately Rs 6,00,000 from the bank. Actual eligibility may vary based on the bank's assessment criteria, collateral provided (if any), credit history, and other factors. It's advisable to approach the bank for a detailed discussion and assessment of the business's financial needs and eligibility.
### Steps to Calculate CC Loan Eligibility:
1. **Calculate Working Capital Requirement (WCR)**:
- Working Capital = Current Assets - Current Liabilities
- From the details provided:
- Current Assets:
- Sundry Debtors: Rs 1,50,000
- Closing Stock: Rs 3,00,000
- Cash on Hand: Rs 50,000
- Total Current Assets = Rs 5,00,000
- Current Liabilities:
- Sundry Creditors: Rs 2,00,000
- Total Current Liabilities = Rs 2,00,000
- Working Capital = Rs 3,00,000
2. **Projected Sales Turnover**:
- Projected Sales Turnover = Rs 30,00,000
3. **CC Limit Calculation**:
- Banks typically provide CC limits based on a percentage of the projected annual turnover. This percentage varies and can range from 20% to 80% depending on the bank's policies, the industry, and the financial health of the business.
4. **Example Calculation**:
- If the bank offers a CC limit of 20% of projected turnover:
- CC Limit = 20% of Rs 30,00,000
- CC Limit = Rs 6,00,000
### Conclusion:
Based on the projected turnover of Rs 30,00,000 and assuming a conservative CC limit of 20% of turnover, the small business person would be eligible for a Cash Credit (CC) loan of approximately Rs 6,00,000 from the bank. Actual eligibility may vary based on the bank's assessment criteria, collateral provided (if any), credit history, and other factors. It's advisable to approach the bank for a detailed discussion and assessment of the business's financial needs and eligibility.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Difference between Date of Payment and Date of Deduction?
- Unregistered suppliers utility
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- ADDITION OF CHALLAN IN TDS RETURN FORM 140
- TODAY INCOME TAX SITE IS NOT WORKING ANY OFFICIAL EXTENSION
- URGENT-Eligible leaves being shown as 24 days for 3 years Articleship instead of 156 days in 108
- LIC maturity claim whether taxable
- Journal entry of busniess expenses
- The TDS balance for March 26 shows a mismatch between the books and the portal; what should be done
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
