Drawing power calculator for a cash credit limit

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Work out your drawing power

Use the figures from your latest stock statement and the margin in your sanction letter. The boxes open on an example.

Eligible stock ₹

Raw material, work in progress and finished goods your lender accepts.

Eligible receivables (debtors) ₹

Money customers owe you that your lender counts. Old debts are often left out.

Trade creditors ₹

What you owe suppliers for goods bought on credit.

Margin your lender keeps %

From your sanction letter. The example uses 25%.

Sanctioned cash credit limit ₹

Enter 0 to see drawing power without the cap.

Amount drawn now, optional ₹

The balance used today, to see the room left.

You can draw up to ₹18,00,000

Drawing power is ₹18,00,000.

These are the example figures. Change any box to use your own.

Stock plus receivables minus creditors: ₹24,00,000
Margin kept back: ₹6,00,000
Drawing power before the cap: ₹18,00,000
Room left to draw: ₹3,00,000

Indicative. Your lender decides what stock and receivables count and the margin it keeps.

How it is calculated

The drawing power formula

A cash credit limit is sanctioned against your current assets. Drawing power is the part of that limit your current assets support today.

Drawing power

DP = (stock + receivables − creditors) × (1 − margin)

Banks commonly work it out this way. It is bank practice, not a regulation, and each lender sets its own margin and decides which stock and receivables are eligible.

What you can draw

usable = the lower of DP and the sanctioned limit

Drawing power can never be more than the sanctioned limit. Room left to draw is the usable amount minus what you have already drawn.

Where the rules come from

Where each figure on this page comes from
Figure	Source	Checked
The drawing power formula is bank practice, not a regulation	RBI Master Circular on asset classification	02-Oct-2026
Drawing power must come from a current stock statement; one older than three months makes drawings irregular	RBI Master Circular on asset classification	02-Oct-2026
Irregular drawing for 90 continuous days can make the account a non-performing asset	RBI Master Circular on asset classification	02-Oct-2026

Worked example

Worked example: a ₹20,00,000 cash credit limit

Example figures, not a real file: eligible stock ₹18,00,000, eligible receivables ₹10,00,000, trade creditors ₹4,00,000 and a margin of 25%.

Drawing power worked step by step
Step	Working	Result
Stock plus receivables minus creditors	₹18,00,000 + ₹10,00,000 minus ₹4,00,000	₹24,00,000
Less the margin	₹24,00,000 × 75%	₹18,00,000
Cap at the sanctioned limit	The lower of ₹18,00,000 and ₹20,00,000	₹18,00,000
Room left to draw	₹18,00,000 minus ₹15,00,000 already drawn	₹3,00,000

You can draw ₹18,00,000, not the full ₹20,00,000, until your stock or receivables grow. If stock fell to ₹12,00,000 with everything else the same, drawing power would fall to ₹13,50,000, and the ₹15,00,000 already drawn would be above it.

Know the limits

Limits of this calculator

It uses one margin for stock and receivables. Some lenders keep a different margin on each.
It takes the stock and receivables you enter as eligible. Your lender decides which ones count.
It does not check the age of your stock statement. Drawings against a statement older than three months are irregular.
For the whole working capital picture, use the working capital calculator. For the product itself, see cash credit and overdraft.

Good to know

Questions and answers

Straight answers on the method, the sources and what the numbers do and do not mean.

How is drawing power calculated?

Add eligible stock and eligible receivables, take off trade creditors, then keep back the lender's margin. Drawing power can never be more than the sanctioned limit. In the example, (₹18,00,000 + ₹10,00,000 minus ₹4,00,000) × 75% = ₹18,00,000. This formula is bank practice, not a regulation.

What is the difference between the sanctioned limit and drawing power?

The sanctioned limit is the ceiling the lender approved. Drawing power is the part of it your current stock and receivables support today. In the example the limit is ₹20,00,000 but the drawing power is ₹18,00,000, so you can draw ₹18,00,000.

What margin do lenders keep on stock and debtors?

Each lender sets its own margin in the sanction letter, and some keep a different margin on stock and on receivables. Use the margin your sanction letter states. The worked example assumes 25%.

Which receivables count for drawing power?

Only the receivables your lender treats as eligible. Many lenders leave out old debts and amounts due from related parties. Your sanction letter lists what counts.

What happens if I draw more than my drawing power?

Drawing above drawing power makes the account irregular. Under the RBI's asset classification rules, an account that stays irregular for 90 continuous days can become a non-performing asset.

How often do I need to submit a stock statement?

Your lender sets the frequency, often monthly. Under the RBI's rules, drawings against a stock statement older than three months are irregular.

Does this calculator affect my CIBIL score?

No. It makes no credit enquiry and asks for no name, phone number or PAN. CIBIL is the credit bureau whose score and report lenders check. Like every page on this site, it uses the analytics described in our Privacy Policy and Cookie policy.

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Sources

How to read these figures

Capnix is not a lender. Rates, amounts and approvals are decided by lenders. Rates shown here are examples, not offers.

Drawing power formula: common bank practice, not a regulation.
Stock statement age and the 90-day irregularity rule: RBI Master Circular on income recognition and asset classification, 01-Jul-2011.
The margin and which stock and receivables count: your lender's sanction letter.

Last checked: 02-Oct-2026.