Question

Mr. S. is a factory-owner and he pays wages to his workers within first 10 days of every month and himself receives payment of the business only after the 20th day of every month therefore, he is facing difficulty in paying wages. If he opens a new loan account, then which type of loan facility should he go for it ?State any one feature of same as well.

Answer 1

Loan given to meet the working capital requirements of a company.given against a collateral security. Interest is charged only on the utilized amount A separate account named cash credit account is opened.