Though MSME's (Micro, Small and Medium Enterprises) are playing an important role in the development of a country by contributing almost 8 percent to India's GDP, often faces challenges in managing their working capital requirements.
The MSMEs in India generally lacks a strong financial back-up, which is the basic requirement for any business. Liquidity crunch is not an unusual situation for them and sometimes, even a contingency fund won't be enough to take care of such emergency.
For such situations, there is one source that has been gaining ground is called as Overdraft facility. Overdraft is a good instrument, which can smartly help you to tackle your short-terms financing needs.
Banks offer overdraft facility to meet business demands or for short-term financing against your assets. And you will be happy to know that even your Gold can be used to avail Overdraft facility.
You will not get entire amount immediately. You can keep borrowing and repaying your money as long as the bank is willing to offer such overdraft facility to you.
Interest will be applied only on the amount utilized. Your gold will be assessed by the bank or lending institute to determine the limit of overdraft.
Many NBFCs and bank also have tailor-made schemes for businesses.
So go for it, if you can repay on time and take your business to the next level..!!