About Corporate Overdraft (OD)
A Corporate Overdraft (OD) is a working-capital facility that allows eligible businesses to withdraw funds up to an approved limit to manage short-term cash-flow needs, supplier payments, inventory and daily operating expenses. Interest is generally charged on the amount utilised, as per the lender’s terms.
Disclaimer: Eligibility, overdraft limit, interest rate, fees, security requirements and approval are subject to the lender’s policies, business profile, documentation and final assessment.
Corporate & Business Overdraft (OD) Facility
Explore working-capital finance options to manage supplier payments, inventory purchases, receivables and everyday business cash-flow needs. Get assistance in exploring suitable lender options for your business.
Rates, limits and approval depend on lender policy, eligibility, documentation and final assessment.
Corporate & Business Overdraft (OD) Facility in India
Manage short-term cash-flow gaps, supplier payments, inventory purchases and day-to-day business expenses with a suitable business overdraft facility. Explore available bank and finance-company options with LoansBazaar India.
Financial assistance and lender-option comparison are subject to eligibility, documentation and the lender's final assessment.
What Is a Business Overdraft Facility?
A Corporate or Business Overdraft (OD) is a revolving credit facility that allows an eligible business to withdraw funds up to a lender-approved limit. It is designed to help manage temporary working-capital requirements when business receipts and payments do not occur at the same time.
Depending on the lender and product, an OD facility may be secured against property, fixed deposits, eligible stock or receivables, or assessed using business financials and banking transactions. Unsecured availability and limits depend on the lender's credit policy.
Key Features & Benefits of Business OD
Business Overdraft Limit, Interest Rate & Charges
Indicative market ranges can vary considerably by lender, borrower profile, facility structure and collateral. The figures below are general reference ranges, not a live lender quotation or an offer of credit.
These broad ranges should not be interpreted as available to every applicant. Some products may have different minimums, maximums, fees, tenure structures or eligibility conditions.
1. Commercial Banks – Corporate & Business OD
Commercial banks may provide working-capital limits for eligible MSMEs, traders and larger businesses.
| Institution / Facility | Indicative Limit | Tenure / Review | Indicative Interest (p.a.) | Indicative Processing Fee |
|---|---|---|---|---|
| State Bank of India (SBI) – Corporate OD / SME CC | ₹10 Lakh–₹100 Cr+ | Typically 12 months; renewal/review applies | 8.50%–11.50% (linked pricing may apply) | 0.35%–1.00% |
| HDFC Bank – Business / Corporate OD | ₹1 Lakh–₹50 Cr | Typically renewable; terms vary | 9.25%–16.00% | Up to 1.00%–2.00%; minimum charges may apply |
| ICICI Bank – Business OD | ₹50,000–₹20 Cr | Typically 12 months; annual review | 9.00%–15.50% | Up to 2.00% |
| Axis Bank – Working Capital OD | ₹5 Lakh–₹25 Cr | Typically renewable | 9.50%–16.50% | 1.00%–2.00% |
| Bank of Baroda – Business OD | ₹50,000–₹10 Cr | Typically renewable | 8.90%–12.50% | 0.50%–1.25% |
Limits, rates, product names and fees are indicative and must be confirmed directly through the relevant lender's current product terms.
2. NBFCs – Business Credit Lines & Flexi Facilities
Some NBFC products are structured as revolving lines, flexi loans or hybrid facilities. These may have different repayment and fee structures from a traditional bank OD.
| Institution / Facility | Indicative Limit | Indicative Tenure | Indicative Interest (p.a.) | Indicative Processing Fee |
|---|---|---|---|---|
| Bajaj Finserv – Flexi Business Facility | ₹1 Lakh–₹80 Lakh | 12–96 months, product-dependent | 13.00%–22.00% | Up to 3.00%–4.00% |
| Tata Capital – Business / Hybrid Facility | ₹1 Lakh–₹75 Lakh | 12–96 months, product-dependent | 12.00%–18.00% | Up to 2.00%–3.00% |
| Poonawalla Fincorp – Business Credit Line | ₹5 Lakh–₹50 Lakh | 12–60 months, product-dependent | 13.50%–20.00% | 1.50%–2.50% |
| L&T Finance – SME Working Capital | ₹3 Lakh–₹50 Lakh | 12–36 months, product-dependent | 12.50%–19.00% | Up to 2.00% |
A flexi or hybrid loan is not necessarily a conventional overdraft. Check whether interest is charged on the utilized balance or on the disbursed loan balance, and review all repayment conditions.
3. Small Finance Banks – MSME & Small Business OD
| Institution / Facility | Indicative Limit | Tenure / Review | Indicative Interest (p.a.) | Indicative Processing Fee |
|---|---|---|---|---|
| AU Small Finance Bank – Business OD | ₹2 Lakh–₹10 Cr | Typically 12 months; review applies | 10.50%–17.50% | 1.00%–2.00% |
| Utkarsh Small Finance Bank – MSME OD / CC | ₹75,000–₹2 Cr | Typically renewable | 11.50%–18.00% | Up to 2.00% |
| Equitas Small Finance Bank – Micro / SME OD | ₹1 Lakh–₹1.5 Cr | Typically renewable | 11.00%–18.50% | 1.50%–2.00% |
| Jana Small Finance Bank – Business OD | ₹1 Lakh–₹1 Cr | Typically renewable | 12.00%–19.00% | 1.50%–2.50% |
Business OD Interest Calculator
Estimate interest for an amount used over a selected number of days. This is a simple illustration, not a lender quotation; actual calculations can depend on the agreement, balance method, applicable rate and fees.
Illustrative formula: Amount Utilized × Annual Rate ÷ 365 × Number of Days. Actual lender calculations may use a different day-count or balance convention.
OD Charges & Costs to Check Before Applying
- Processing fee: May be a percentage of the sanctioned limit or a fixed amount, plus applicable taxes.
- Renewal or review fee: May apply when the lender reviews or renews the facility.
- Commitment or non-utilization charges: Some agreements may charge for under-utilization or other specified conditions; ask for the exact threshold and calculation.
- Documentation and security costs: Valuation, legal review, stamp duty, registration or other charges may apply to secured facilities.
- Penal or overdue charges: May apply for overdue interest, excess drawings or breach of facility terms.
- Prepayment and closure terms: Do not assume every OD is free to close. Confirm any applicable closure, foreclosure or notice-period charges in writing.
- GST and other statutory charges: Applicable taxes may be charged separately.
Overdraft (OD) vs Cash Credit (CC)
| Feature | Overdraft (OD) | Cash Credit (CC) |
|---|---|---|
| Common use | Short-term cash-flow gaps and flexible liquidity | Working capital, inventory and receivables financing |
| Security | May be secured or unsecured, depending on product | Often secured by eligible stock, receivables or other collateral |
| Interest | Generally on the utilized balance under the facility terms | Generally on the utilized balance; drawing-power rules may apply |
| Availability | Approved limit and withdrawal rules apply | Limit may be governed by stock statements and drawing power |
| Renewal | Subject to lender review and terms | Subject to lender review, stock/receivable assessments and terms |
Exact structures vary by lender and product. Compare the sanction terms rather than relying only on the facility name.
Business Overdraft Eligibility Criteria
- Business constitution: Sole proprietorship, partnership, LLP, private limited or public limited company, subject to lender policy.
- Business vintage: An operating history of around 3 years may be preferred by some lenders; newer businesses may be assessed under other products.
- Turnover and cash flow: Satisfactory turnover, banking transactions and capacity to service interest and other liabilities.
- Credit history: Acceptable business and promoter credit profile, with no material undisclosed defaults.
- Banking history: Current-account statements and business transactions suitable for assessment.
- Collateral, if required: Eligible property, fixed deposits, stock, receivables or other security accepted by the lender.
- Compliance: Applicable PAN, GST, tax, registration and other legal requirements.
Eligibility, minimum turnover, credit score and collateral requirements differ across lenders and facilities. Meeting general criteria does not guarantee approval.
Documents Required for Corporate & Business OD
- Certificate of Incorporation, partnership deed or LLP agreement, as applicable
- Shop and Establishment or other relevant registration, where applicable
- MOA/AOA and borrowing board resolution for applicable companies
- GST and Udyam details, if applicable
- PAN and Aadhaar, as applicable
- Other accepted identity and address proof
- Photographs and beneficial ownership details, if requested
- Audited balance sheets and profit-and-loss statements, commonly for 2–3 years
- Business and promoter ITRs, as applicable
- GST returns and current-account statements, commonly 6–12 months
- Existing loan details and repayment records, if any
- Property title documents and valuation/legal papers
- Fixed-deposit details or lien documents
- Stock, receivables and debtor statements
- Additional guarantees or security papers required by the lender
The final checklist depends on the business type, requested limit, lender and security structure. Submit documents only through appropriate, secure lender channels.
How to Explore an OD Facility with LoansBazaar India
EMI Calculator for Other Business Loan Options
A standard overdraft usually does not follow a fixed EMI schedule like a conventional term loan. For a term loan, machinery loan, expansion loan or another EMI-based facility, use our calculator to estimate a monthly installment from the loan amount, interest rate and repayment tenure.
Explore All Finance Categories
Explore more finance categories through LoansBazaar India. Availability, lender options and eligibility vary by product.
Personal & Retail Finance
Business & MSME Finance
Corporate & Large Business Finance
Agriculture & Rural Finance
School, Hospital & Institutional Finance
Specialized Finance
Product links above direct to the general application page unless another internal page is specified. Create dedicated product pages and update these URLs as those pages become available.
Frequently Asked Questions
1. What is the main benefit of a business overdraft?
It provides access to an approved revolving limit for eligible short-term business cash-flow requirements. Interest is generally based on the amount used and the applicable period.
2. Is there a fixed EMI on an OD facility?
A conventional OD usually does not have a standard fixed EMI schedule. Interest servicing, repayment expectations and other conditions are specified by the lender. Flexi or hybrid loans may work differently.
3. Can I apply for an OD without collateral?
Some lenders may assess unsecured business credit facilities based on financials, banking transactions and credit history. Availability, amount and pricing depend on the lender's policy.
4. How much overdraft limit can my business get?
The limit depends on turnover, cash flow, banking history, existing obligations, credit profile, security and lender policy. Published ranges are not guaranteed limits.
5. What documents are normally required?
Common documents include business registration, KYC, financial statements, tax returns, GST records where applicable and bank statements. Security documents may be required for secured facilities.
6. Are processing and renewal fees applicable?
They may apply. Ask the lender for the current schedule of charges, applicable taxes, renewal terms and any commitment, non-utilization or closure charges.
7. Does LoansBazaar India guarantee loan approval?
No. LoansBazaar India provides financial information and assistance in exploring available options. The lender independently assesses each application and makes the final credit decision.
8. How can I estimate interest or EMI?
Use the OD interest estimator on this page for an illustrative daily-balance calculation. For EMI-based term loans, visit the LoansBazaar India EMI Calculator. Actual lender calculations may differ.
Last updated: 26 October 2026