What is meant by cash credit?
please answer
Answers
cash credit is a short-term financing solution a business customer has at their disposal. If the customer doesn't have enough funds in their account, they can use the cash credit for routine banking transactions up to the credit limit.
Ⱨø₱ɇ ł₮ ₩łⱡⱡ ⱨɇⱡ₱ ʉ ₱ⱡⱬ ₥₳ɽ₭ ₥ɇ ₳₴ ฿ɽ₳ł₦ⱡł₴₮ ₳₦đ ₱ⱡⱬ ₣øⱡⱡø₩ ₥ɇ❤❤
Answer:
please make me brainliest and follow me
Explanation:
Cash credit is commonly offered to businesses rather than to individual consumers. Financial institutions normally require the business customer to put down a form of security as collateral in exchange for cash. This security can be a tangible asset, such as stock, raw materials, or another commodity. The credit limit extended on the cash credit account is normally a percentage of the value of the collateralized security. Although it is a collateralized form of financing, cash credit is normally subject to credit approval.
As mentioned above, cash credit is a short-term financing solution a business customer has at their disposal. If the customer doesn't have enough funds in their account, they can use the cash credit for routine banking transactions up to the credit limit. Unlike other credit products, interest is charged on the daily closing balance.
Cash credit may also be referred to as a cash reserve account. A cash reserve is an unsecured line of credit that acts just like overdraft protection. It typically offers higher overdraft limits and has smaller real interest costs on borrowed funds than an overdraft, since penalty fees are not triggered for using the account.