Drawing Power (DP) with Creditors Adjustment Calculator
What is my actual withdrawable limit from my Cash Credit account after netting unpaid trade creditors and applying bank margins?
Financial Inputs
Total credit facility approved by the bank credit committee.
Inventory of unmanufactured raw materials at cost.
Semi-finished goods on shop floor valued at direct material + labor cost.
Finished products ready for sale in warehouse.
Unpaid bills to raw material suppliers (must be deducted to get paid stock).
Book debts from approved corporate/commercial buyers within 90 days from invoice date.
Aged or disputed debtors exceeding 90 days (excluded by banks from DP).
Margin retained on paid inventory (standard 25%).
Margin retained on eligible book debts (standard 30–40%).
Effective Usable Drawdown
Your effective Drawing Power (DP) is ₹450 Lakh (Stock DP: ₹240L + Debtor DP: ₹210L).
Total Calculated Drawing Power
4,50,00,000
Net Paid Inventory
3,20,00,000
Drawing Power on Paid Stock
2,40,00,000
Drawing Power on Debtors
2,10,00,000
Key Financial Takeaways
- Your effective Drawing Power (DP) is ₹450 Lakh (Stock DP: ₹240L + Debtor DP: ₹210L).
- Against your sanctioned facility limit of ₹500 Lakh, you can currently draw up to ₹450 Lakh.
- Operational drawal deficit of ₹50 Lakh must be bridged by realizing receivables or paying down unpaid creditors.
Frequently Asked Questions
Why do banks deduct sundry creditors from inventory in Drawing Power calculations?
If goods have been purchased on credit and are still unpaid, the supplier is effectively financing that inventory. To prevent double financing, banks only allow drawing power against "paid inventory" (Total Stock minus Sundry Creditors for goods).
What happens if my Drawing Power is lower than my sanctioned CC limit?
If your DP is lower than your sanctioned limit, the bank system will automatically restrict your account withdrawal up to the DP amount. Drawing beyond the DP is treated as an irregular drawal and attracts penal interest.
Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
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