A Working Capital Loan provides funds to businesses for managing short-term operational and cash flow requirements such as inventory purchases, supplier payments, salaries and receivables gaps.

An Overdraft facility allows an eligible business to withdraw funds up to a sanctioned limit, generally against specified security or financial criteria.

Cash Credit is a working capital facility that allows businesses to borrow funds up to an approved limit, usually against eligible stock and receivables.

Both provide flexible working capital funding. OD is generally structured around a sanctioned borrowing limit, while CC is commonly linked to working capital assets such as stock and receivables.

The sanctioned amount depends on factors such as business turnover, profitability, banking transactions, cash flows, existing liabilities, credit profile and working capital requirements.

Interest rates vary based on the lender, facility type, business profile, creditworthiness, financial performance and security offered.

Eligibility for new businesses is more limited. Most lenders prefer businesses with an established operating and financial track record.

Collateral requirements depend on the lender, loan amount, business profile and whether the facility is secured or unsecured.

Interest is generally calculated on the amount utilized rather than the entire sanctioned limit, subject to the lender's terms and applicable charges.

Typically, lenders require KYC documents, business registration documents, GST and tax records, financial statements, bank statements and details of existing liabilities.