Funding & Capital · Working Capital

Liquidity when you need it. Interest only on what you use.

OD / CC -
Working Capital
Consultancy

Overdraft Facility Cash Credit Loan Fast Approval · Expert CA Support

Overdraft (OD) and Cash Credit (CC) are the two most practical short-term financing tools for businesses. We provide end-to-end OD/CC consultancy - from documentation and bank coordination to securing the best credit limits for your working capital needs.

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How OD / CC Works - Live Example

Sanctioned limit: ₹50 Lakhs · Drawn: ₹31 Lakhs

₹0₹12.5L₹25L₹37.5L₹50L

₹31L

Drawn (Interest-Bearing)

₹19L

Available (Interest-Free)

💡

Interest is charged only on ₹31L drawn - not on the full ₹50L limit. Repay and redraw as your cash cycle demands.

Understanding OD and CC

Two tools for short-term business liquidity

Overdraft (OD) and Cash Credit (CC) are essential short-term financing instruments for businesses. Both allow you to access funds beyond your current cash position - but they work in different ways and are suited to different needs.

An Overdraft facility allows you to withdraw more than your account balance, up to a sanctioned limit, using your existing current account. It is ideal for emergency or temporary cash needs.

A Cash Credit loan provides a fixed revolving credit limit - typically based on stock and debtor levels - through a separate cash credit account. It is designed specifically for working capital management and day-to-day operational needs.

Both products charge interest only on the amount actually drawn - not on the full sanctioned limit - making them significantly more cost-efficient than term loans for cyclical cash requirements.

Quick Definitions

OD vs CC at a glance

OD - Overdraft Facility

Linked to your existing current account. Draw beyond your balance up to the sanctioned OD limit. Best for temporary, short-duration liquidity gaps and emergency business cash needs.

CC - Cash Credit Loan

A separate cash credit account with a revolving limit tied to your stock and receivables. Best for ongoing working capital - manufacture, purchase inventory, pay wages - and renews annually.

Side-by-Side Comparison

Cash Credit vs Overdraft - key differences

Feature	Cash Credit (CC)	Overdraft (OD)
Primary Purpose	Ongoing working capital needs	Emergency or temporary cash needs
Credit Limit Basis	Fixed - based on stock & debtor levels	Flexible - based on account relationship
Interest Charged On	Full amount withdrawn	Only on amount actually used
Account Type	Separate cash credit account	Linked to existing current account
Tenure	Usually 1 year, renewable annually	Short-term, often reviewed quarterly
Security Required	Collateral - inventory, receivables	May or may not require security
Best Suited For	Manufacturers, traders, SMEs with inventory	Service businesses, professionals, short gaps

Why OD / CC?

Advantages over traditional term loans

For short-term working capital needs, OD and CC facilities are almost always more cost-effective and flexible than a conventional term loan.

Instant Liquidity

Access funds the moment your cash flow dips - no fresh loan application or waiting period. Draw and repay as your business cycle demands.

Pay Interest Only on What You Draw

Unlike a term loan where interest runs on the full amount from day one, OD/CC interest is charged only on your outstanding drawn balance.

Revolving Credit Line

Repay and redraw repeatedly within your sanctioned limit - no closure, no fresh application needed for each working capital requirement.

Minimal Documentation (Renewals)

Once sanctioned, annual renewals require minimal paperwork - especially when your CA maintains clean financials and banking statements year-round.

Linked to Business Performance

CC limits grow with your inventory and receivables - so as your business scales, your working capital facility can scale with it through limit enhancements.

Supports Government MSME Schemes

Overdraft and cash credit facilities are supported under various MSME financial inclusion schemes - making them accessible to women entrepreneurs and micro businesses too.

Eligibility

Who can apply for OD / CC?

Manufacturers & Traders

Ideal for businesses with inventory cycles - buy raw material, manufacture, sell, and repay.

SMEs & MSMEs

Small and medium enterprises with seasonal or cyclical cash flow - one of the most common use cases.

Professionals & Service Firms

Doctors, architects, consultants - overdraft facilities suit service businesses with lumpy receivables.

Startups & New Businesses

Early-stage companies needing a short-term buffer while scaling revenue and managing delayed payments.

Women Entrepreneurs & MSME

Government financial inclusion schemes support OD access specifically for women-led and micro businesses.

Contractors & Exporters

Businesses with large project-based cash gaps or export receivable delays benefit from OD/CC flexibility.

Our Role

What your CA does in the OD / CC process

Getting the best credit limit at the best rate requires more than just applying - it requires expert preparation. Here's where we add value.

Documentation Preparation

We prepare all required financials, stock statements, debtor/creditor statements, and projections - clean, accurate, and bank-ready.

Bank Coordination & Negotiation

We liaise directly with bank credit officers, respond to queries, and negotiate for the best limit and interest rate on your behalf.

Limit Assessment & Enhancement

We assess the right OD/CC limit for your business cycle and help you build the financials needed to justify limit enhancements as you scale.

Annual Renewal Support

We manage the yearly renewal of your CC/OD facility - submitting updated financials, maintaining clean banking records, and ensuring uninterrupted access to your working capital.

Quick Enquiry

OD / CC -Working CapitalConsultancy