Cash Credit (CC) is a short-term loan offered to businesses to meet their working capital requirements.

Overdraft facility (OD) is credit funding offered by banks to individuals and companies to withdraw money from the banks in which they have accounts, even if their account balance is low, zero or below. Cash Credit and Overdraft are referred to as credit limits sanctioned by lenders. Both of these financial instruments are used to borrow money against hypothecation of inventory or financial statements.


Cash credit limit is availed on hypothecation of stocks and inventory

Cash Credit is availed for business purposes only

The loan amount is based on the volume of stocks and inventory

Need to Submit Stock statement on regular intervals

Amount can go beyond the property value depending upon the credit comfort


Overdraft facility is availed based on credit history, relationship with the bank, and can be against investments like FDs, insurance policies, etc.

Overdraft facility can be used for any purpose, including business-related and others

The loan amount is based on financial statements and security deposit

No Need to submit stock statements

Normally funded within the property value i.e. 70-80% of property value