CC/OD Facility

Cash Credit (CC) is collateralized by inventory, stock, or receivables, with the drawing power determined by the value of the stock.On the other hand, Overdraft (OD) permits withdrawals that exceed your bank balance, up to a predetermined limit, and is typically secured by fixed deposits, real estate, or other securities.

The credit limit is determined by factors such as your business turnover, profitability, credit history, the security provided (which may include inventory, receivables, or property), and your working capital requirements. Generally, this limit ranges from 80% to 120% of the value of the current assets that are pledged.

Indeed, you are permitted to withdraw any sum up to your authorized limit at any time. In the case of a Credit Card, the available drawing power fluctuates with the value of the stock. For an Overdraft, you may access the entire limit as required. Interest is applied solely to the portion that has been utilized.

CC/OD facilities function as revolving credit options. You have the flexibility to pay interest on a monthly basis and can repay the principal at any time, or you may opt for a structured repayment plan. This facility is renewed on an annual basis, providing ongoing access to funds for business operations.

Credit facilities are generally secured by means of stock, book debts, or receivables. Overdrafts can be secured against fixed deposits, property, National Savings Certificates, or other forms of collateral. The nature of the collateral is determined by the amount of the facility and the profile of your business.