Banking Services - MSME & SME (OD/CC) Loan

MSME & SME (OD/CC) Loan

 What is it?

• MSME Loan / SME Loan: A financial facility provided to Micro, Small & Medium Enterprises to meet working capital and business expansion needs.

• OD (Overdraft) / CC (Cash Credit): Types of credit facilities offered by banks to businesses for managing daily operations and short-term funding requirements.

 Key Features

• Loan Type: Secured / Unsecured (depending on bank & business profile)

• Eligibility: MSMEs, SMEs, traders, manufacturers, service providers

• Purpose:

  • Working capital needs

  • Stock purchase

  • Machinery & equipment

  • Business expansion

• Credit Limit: Based on business turnover, financials, and credit score

• Interest Rate: Usually ranges between 9% – 16% p.a. (varies per bank)

• Repayment: Flexible – interest charged only on the amount utilized

 Types of Facilities

1. Overdraft (OD)

   • Withdraw funds from the account beyond available balance.

   • Interest charged only on utilized amount.

2. Cash Credit (CC)

   • Credit limit sanctioned against stock, receivables, or collateral.

   • Helps manage daily working capital.

Benefits

• Quick access to working capital

• Flexibility in withdrawal & repayment

• Interest only on utilized funds

• Helps in business growth & expansion