Overdraft/CC – Tax Crafted Solutions

Overdraft & Cash Credit Services

Boost your working capital with flexible Overdraft and Cash Credit facilities. Access funds quickly to meet operational needs

What are Overdraft and Cash Credit Facilities?

Overdraft (OD) and Cash Credit (CC) are financial instruments used by businesses to manage working capital shortages.

Overdraft: A facility that allows you to withdraw money from your current account even if the balance is zero, up to a sanctioned limit. Interest is charged only on the amount utilized.

Cash Credit: A short-term loan provided to businesses to meet their working capital requirements. It is secured against current assets like inventory or receivables.

Key Features

Our Services

Requirements & Eligibility

Get your limit sanctioned with minimal hassle.

Documents Required

Eligibility

Benefits

Manage Your Cash Flow Efficiently

Get expert assistance to secure the right OD or CC limit for your business needs.

Frequently Asked Questions

Key details about Overdraft & Cash Credit Limits.

What is the difference between Overdraft (OD) and Cash Credit (CC)?

Cash Credit (CC) is primarily given against the hypothecation of stock (inventory) and receivables (debtors). Overdraft (OD) is usually given against financial securities like Fixed Deposits (FD), shares, or property. Both are working capital limits.

How is interest calculated on an OD/CC limit?

Unlike term loans where interest is charged on the total principal, in OD/CC, interest is charged only on the amount utilized and for the number of days it is used. This makes it a cost-effective way to manage daily cash flow needs.

Is collateral mandatory for getting a CC limit?

Yes, CC limits are secured loans. Primary security involves your business assets (stock & book debts), and banks often require collateral security in the form of residential/commercial property or FDs, depending on the loan amount.

What is the renewal process for these limits?

OD and CC limits are typically valid for 12 months. They must be renewed annually by submitting updated financial statements (Audited Balance Sheet, ITR) and stock statements to the bank for review.

Can I get an unsecured OD limit?

Yes, banks offer “Unsecured Business OD” (often called Dropline Overdraft) based on your business turnover, vintage, and credit score (CIBIL). However, interest rates for unsecured ODs are generally higher than secured limits.