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There are several documents that need to be submitted when a cash credit facility is required. This includes documents that reflect the formation of the business entity as well as various documents relating to the performance of the business. As long as these are available there should not be any problem regarding opening a cash credit account.

Unlike a normal loan, there is no fixed rescheduled structure for a cash credit. This reduces the pressure for a borrower because there is no sum that has to be paid each month. On the contrary, the figure can be repaid as and when any amount is available which will mean that the borrower has the facility to repay when he/she has the necessary funds and his/her position is such that it allows for repayment.

Every business activity needs to make a match between the time period for which the funds are raised and the manner in which they are utilised. This is necessary to ensure that there is some sort of asset liability mismatch and there are no problems in paying back the amounts borrowed. Every business has a short-term need to meet working capital requirements and one of the routes in which this can be tackled is through the use of cash credit facility.