Cash Credit vs. Overdraft: Choosing the Right Facility for Your Business Growth

Running a business means dealing with constant inflows and outflows of money. Whether it’s paying vendors on time, covering employee salaries, or managing unforeseen expenses, entrepreneurs often need quick access to working capital. Two popular banking facilities that cater to these short-term financing needs are Cash Credit (CC) and Overdraft (OD).At first glance, both options may look similar — each allows businesses to withdraw more money than they have in their accounts. However, the terms, eligibility, limits, and suitability for businesses differ significantly. Choosing the right one could mean the difference between smooth operations and unnecessary financial strain.In this detailed guide, we’ll explore what Cash Credit and Overdraft facilities are, how they work, their differences, pros and cons, and most importantly — which one may be better for your business.