"Running a business is like sailing a ship; you can never be fully prepared. Hence, despite having strategies in place, businesses may need more funds due to multiple reasons like delays in receivables, emergencies and capital expenses. Banks offer cash credit, overdrafts and other facilities, but the challenge is understanding the features and choosing the best option.
Cash credit is a short-term finance option that businesses can avail of. Businesses hypothecate their assets like stock and inventory to avail the credit. This can be used to fund their working capital requirements.
Whereas, overdraft facility can be availed on the basis of financials and collateral security which does not require monthly stock and book debt statement."