Business Overdraft Facility

An overdraft is a sanctioned limit attached to your current account. You can withdraw beyond your balance up to that ceiling, put money back whenever collections arrive, and draw again — repeatedly, for as long as the limit is live. Nothing is disbursed to you up front, so nothing sits idle costing interest.

It is built for the gap between paying out and getting paid: salaries due before a customer settles, a supplier demanding advance, GST falling due in a slow month. It is not the right tool for buying machinery or property — those belong to a term loan or a loan against property.

Service businesses, consultants, contractors, agencies, logistics operators and asset-light firms get the most out of an overdraft, because they carry no stock for a cash credit limit to be sized against. Traders and manufacturers often run both: cash credit against inventory and receivables, and an overdraft for everything else.

It also suits any business with lumpy income — a few large invoices a quarter rather than steady daily collections. If your need is a single, known, one-time amount, a short demand loan is usually cheaper than holding an overdraft limit all year.

Lenders publish different criteria, but they are all asking the same things: is the business genuinely operating and for how long; does turnover show up in GST returns and bank credits; does the current account show healthy inflows rather than bounced cheques; are existing loans being repaid on time; and if collateral is offered, is the title clean.

Proprietorships, partnerships, LLPs and private limited companies can all apply. Vintage, turnover and credit-score thresholds vary by lender and profile, so a decline from one lender says very little about the next. Use our eligibility checker for an indicative read before you apply anywhere.

Indicative pricing on our panel runs 10.00% – 16.00% p.a. per annum, as of 10 July 2026. Your actual rate depends on security, turnover, industry, credit history and limit size, and is decided by the lender — treat any single quote as a starting point, not a benchmark.

Beyond interest, budget for a processing fee on the sanctioned limit, an annual renewal or review fee, and valuation and legal costs where property is offered as security. Always read the total cost in the sanction letter rather than the headline rate. Our rates page lists the current indicative ranges across products.

For the mechanics behind the facility, our explainer on how an overdraft works walks through drawing power, interest on utilisation and renewal. If you are still choosing between facilities, the business funding guide compares them side by side, and Chennai businesses can start with overdraft limits in Chennai.

• KYC of the business and of the proprietor, partners or directors.
• GST certificate, Udyam registration, partnership deed or incorporation documents.
• Income tax returns and financial statements for the last two to three years.
• GST returns for the recent period, matching your declared turnover.
• Bank statements for all operating current accounts, usually twelve months.
• Sanction letters and repayment track record for existing loans and limits.
• Property papers and tax receipts, where collateral is being offered.

1. Tell us the requirement — line of business, turnover and the monthly shortfall you are managing.
2. Free profile review — we read your financials, GST returns and bank conduct the way a credit officer will.
3. Pick the structure — overdraft, cash credit or a short demand loan, secured or unsecured, sized to your cash cycle.
4. Prepare the file — most applications lose time on paperwork, not on credit quality.
5. Apply with matching lenders — we place the file only where the criteria actually fit.
6. Compare and close — we weigh total cost across offers and stay with you through documentation until the limit is live.