Rytvae Consulting · Think Right · Invest Right
Drawing Power Calculator
Result
Chart
Show formula & working
Drawing power = (Stock − Creditors for goods) × (1 − Stock margin) + Eligible receivables × (1 − Receivables margin)
Usable = lower of Drawing power and Sanctioned limit
Details
How this works
A cash credit limit is a ceiling; what you can draw each month is the drawing power, worked out from the stock and receivables statement you submit.
Stock you have not paid for is the supplier's money, so creditors for goods come off first. Each asset then has a margin — the part you fund yourself.
Frequently asked questions
How often is drawing power reset?
Usually monthly, from the stock and book-debt statement. Lenders may also ask for a periodic stock audit.
What happens if the balance is above drawing power?
The excess is irregular. Banks usually ask for it to be regularised quickly, and persistent irregularity affects the account's classification.
Working capital limits up for renewal?
Assessment method, drawing power and the right mix of CC, OD and bills change what you can draw. Talk to Rytvae.