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Key Features of HDFC Bank Business Loan with Overdraft (OD) Facility

  • Types of Overdraft Facilities:
    • Dukandar Overdraft: For retailers, shopkeepers, and Kirana stores with credit limit up to ₹10 lakh without collateral.
    • Xpress GST Overdraft: For MSMEs filing regular GST returns with collateral-free funding up to ₹50 lakh.
    • Dropline Overdraft: Unsecured facility with limits from ₹1 lakh to ₹25 lakh where limit reduces monthly.
    • Overdraft Against Property (ODAP): Secured against residential, commercial, or industrial property with high limit up to ₹10 crore.
    • Overdraft Against Fixed Deposit: Up to 90% of FD value as overdraft with minimum FD amount of ₹25,000.
    • Smartdraft (Salary Plus OD): For salary account holders with pre-approved offers.
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  • Loan Amount: Dukandar Overdraft: Up to ₹10 lakh; Xpress GST Overdraft: Up to ₹50 lakh; Dropline Overdraft: ₹1 lakh to ₹25 lakh; Overdraft Against Property: Up to ₹10 crore; Overdraft Against FD: Up to 90% of FD value (minimum ₹25,000 FD).
  • Interest Rates: Competitive rates ranging from 10.75% to 25% per annum depending on product and credit profile. Interest is calculated only on the amount withdrawn, not the entire sanctioned limit, making it cost-effective compared to traditional loans.
  • Collateral and Security: Dukandar Overdraft, Xpress GST Overdraft and Dropline OD are collateral-free. Overdraft Against Property requires residential/commercial property as security. Overdraft Against FD is secured against fixed deposits with HDFC Bank.
  • Repayment Flexibility: No fixed EMIs for most OD facilities - repay as per your cash flow. For Dropline OD, the limit reduces monthly until the tenure ends. Auto-renewal options available for facilities like Dukandar and Xpress GST Overdraft.
  • Tenure: 12 to 48 months for unsecured facilities like Dropline OD. Secured facilities like Overdraft Against Property have flexible tenures often linked to property valuation.
  • Purpose: Funds can be used for working capital needs, managing cash flow gaps, paying suppliers, handling unexpected expenses, or funding business expansion. Suitable for businesses in manufacturing, trading, services, and retail.
  • Processing Fees and Charges: Processing fees up to 2% of loan amount + GST (nil for loans up to ₹5 lakh for micro/small enterprises). No commitment charges on unused amounts. Minimal or no prepayment penalties for most facilities.
  • Eligibility: Business Type: Proprietors, partnerships, private limited companies, or self-employed professionals. Business Vintage: Minimum 3 years of continuous operation for most OD facilities. Age: Applicant must be 21-65 years at loan maturity. Credit Score: Preferably 700+ for unsecured facilities.
  • Documentation: Identity proof, address proof, business proof (GST registration, trade license), financial documents (ITR, balance sheets, bank statements). Property documents required for Overdraft Against Property. Minimal documentation for pre-approved offers.
  • Application Process: Online via HDFC Bank website or NetBanking, or visit any HDFC Bank branch. Eligibility can be checked online in 60 seconds. Pre-approved customers may get disbursal in as little as 10 seconds.
  • Additional Benefits: No stock statements required for facilities like Dukandar Overdraft. Dedicated customer support. Online tools and NetBanking access for easy management. Optional Credit Protect Plan insurance available.
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Benefits of HDFC Bank Business Loan Overdraft

  • Flexible Fund Access: Overdraft allows businesses to withdraw funds as needed up to the approved limit, providing flexibility to manage cash flow fluctuations. Pay interest only on the amount utilized, not the entire sanctioned limit, reducing borrowing costs.
  • Collateral-Free Options: Facilities like Dukandar Overdraft and Xpress GST Overdraft require no collateral, enabling small businesses without significant assets to secure funding up to ₹50 lakh (or ₹75 lakh in select locations).
  • Quick and Easy Access: Fast approval and disbursal, with eligibility checks in 60 seconds and disbursals as quick as 10 seconds for pre-approved customers. Minimal documentation for facilities like Xpress GST Overdraft (GST returns and bank statements).
  • No Fixed EMIs: Unlike term loans, OD facilities offer flexible repayment without mandatory equated monthly installments (EMIs), allowing businesses to repay based on cash flow availability.
  • Cost Efficiency: No commitment charges on the unused portion of the overdraft limit, ensuring businesses only pay for what they use. Competitive interest rates and daily interest calculation reduce overall borrowing costs.
  • High Loan Limits: Unsecured OD facilities offer up to ₹50 lakh (e.g., Xpress GST Overdraft), while secured options like Overdraft Against Property provide up to ₹10 crore, catering to diverse business scales.
  • Minimal Administrative Burden: No need for regular stock statements for facilities like Dukandar Overdraft or Overdraft Against Property, reducing paperwork and compliance efforts.
  • Business Growth Support: Funds can be used for expansion, inventory purchase, debt consolidation, or maintaining payment history, fostering long-term business growth. Helps businesses capitalize on market opportunities.
  • Tailored Solutions: Specific products for different needs - Dukandar for retailers, Xpress GST for MSMEs, OD against property for established businesses, and OD against FD for those wanting liquidity while preserving savings.
  • Seamless Management: Online tools and NetBanking access for easy management of OD facilities. Dedicated customer support for application, disbursal, and post-disbursal queries.
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How to Apply for HDFC Bank Business Loan Overdraft

  • 1. Online Application Process
    • Step 1: Visit the HDFC Bank Website
      • Go to www.hdfcbank.com
      • Navigate to SME Banking or Business Banking > Working Capital > Overdraft Facilities
    • Step 2: Choose the OD Product
      • Select the specific overdraft facility that suits your business needs
      • Review eligibility criteria and features displayed on the product page
    • Step 3: Check Eligibility
      • Click on "Apply Now" or "Check Eligibility" button
      • Eligibility can often be assessed in 60 seconds
    • Step 4: Fill the Application Form
      • Complete the online application form with personal, business, and financial details
      • Specify the desired overdraft limit and purpose
    • Step 5: Upload Documents
      • Upload required documents (scanned copies or PDFs)
      • Identity/Address Proof: PAN card, Aadhaar, voter ID, or passport
      • Business Proof: GST registration, trade license, or partnership deed
      • Financial Documents: ITR and balance sheet for 2 years, 12 months' bank statements
    • Step 6: Submit Application
      • Review and submit the application
      • You will receive an application reference number for tracking
  • 2. Branch Application Process
    • Step 1: Visit an HDFC Bank Branch
      • Locate the nearest HDFC Bank branch using the branch locator on their website
    • Step 2: Consult a Relationship Manager
      • Discuss your business needs and the suitable OD facility
      • The manager will guide you on eligibility and documentation
    • Step 3: Complete the Application Form
      • Fill out the physical application form provided by the bank
      • Provide details about your business, financials, and desired overdraft limit
    • Step 4: Submit Documents
      • Submit hard copies of required documents
      • For secured facilities like Overdraft Against Property, include property documents
    • Step 5: Verification
      • The bank will verify your documents and may conduct a physical inspection
    • Step 6: Approval and Disbursal
      • Upon approval, the overdraft facility is activated in your current account
      • Processing time varies based on the facility and documentation completeness
  • 3. Applying for Smartdraft (Salary Plus OD, if applicable)
    • Step 1: Log in to NetBanking
      • For salary account holders, log in to HDFC Bank NetBanking
    • Step 2: Access Offers
      • Go to the Offers section and select Smartdraft

Eligibility Criteria for HDFC Bank Business Loan Overdraft

  • Business Type: Proprietors, partnership firms, private limited companies, or self-employed professionals engaged in manufacturing, trading, services, or retail. Includes MSMEs, small businesses, retailers, wholesalers, doctors, chartered accountants, and other professionals.
  • Business Vintage: Minimum 3 years of continuous business operation for most OD facilities (e.g., Dukandar Overdraft, Xpress GST Overdraft, Dropline OD). For Overdraft Against Property, a stable business track record is preferred, typically 3+ years.
  • Annual Turnover: Minimum turnover of ₹40 lakh per annum for general business loans and most OD facilities. Specific facilities like Dukandar Overdraft may have lower turnover requirements, depending on the business scale.
  • Age of Applicant: Applicant must be between 21 and 65 years of age at the time of loan maturity.
  • Credit Score: A credit score of 700 or above is preferred for unsecured OD facilities (e.g., Dukandar Overdraft, Xpress GST Overdraft). For secured facilities like Overdraft Against Property, a slightly lower score may be considered, subject to collateral strength.
  • Banking Relationship: Existing HDFC Bank customers may receive faster approvals or pre-approved offers (e.g., for Overdraft Against FD or Smartdraft). Non-customers are eligible but may need to open a current account with HDFC Bank.
  • Scheme-Specific Eligibility Criteria
    • Dukandar Overdraft: Retail/wholesale business with 12 months' bank statements. Minimum 3 years in business. No collateral required.
    • Xpress GST Overdraft: Regular GST filings with no delays beyond 20 days. Business operational for at least 3 years. No existing cash credit or collateral-backed loans.
    • Dropline Overdraft: For manufacturers, traders and professionals. Minimum 3 years in business. Professional qualifications required for doctors/CAs.
    • Overdraft Against Property: Ownership of residential/commercial property free of legal disputes. Stable business track record preferred.
    • Overdraft Against Fixed Deposit: Active FD with HDFC Bank (minimum ₹25,000, tenure of 6 months and 1 day). No additional documentation for pre-approved customers.
    • Repayment Capacity: The bank evaluates the business's ability to pay interest on the utilized OD amount, as there are no fixed EMIs. Stable cash flow and profitability are key.
    • GST Compliance: Regular and timely GST filings (no delays beyond 20 days) are mandatory for Xpress GST Overdraft. For other facilities, GST returns for the last 12 months are often required.
    • Documentation Readiness: Applicants must have up-to-date financial statements, KYC documents, and business registration proof for faster loan processing.
    • No Major Defaults: Businesses should not have any recent loan defaults or write-offs reported in CIBIL or other credit bureaus.
    • Location of Business: The business should be located in an area where HDFC Bank operates and provides overdraft facilities. Urban, semi-urban, and select rural areas are typically eligible depending on the product.
    • Income Tax Returns (ITRs): The business must have filed ITRs for at least the last two financial years. This helps the bank assess financial stability and repayment capacity.
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Documents Required for HDFC Bank Business Loan Overdraft

  • For All Applications
    • Identity Proof (for applicant and co-applicant, if any): PAN card (mandatory), Aadhaar card, Voter ID, Passport, Driving license
    • Address Proof (for applicant and business): Aadhaar card, Voter ID, Passport, Utility bill (electricity, water, or gas bill, not older than 3 months), Rental agreement or property tax receipt
    • Business Proof: GST registration certificate, Trade license, Shop and Establishment Act certificate, Partnership deed (for partnership firms), Certificate of incorporation and Memorandum of Association (for private limited companies), Proof of business continuity (e.g., business registration or sales receipts)
  • Financial Documents
    • Income Tax Returns (ITR): ITR with computation of income for the last 2 years (3 years for Overdraft Against Property)
    • Balance Sheet and Profit & Loss: Certified by a Chartered Accountant for the last 2-3 years
    • Bank Statements: 12 months' statements (personal and business accounts, preferably from a current account)
    • GST Returns: For last 12 months (mandatory for Xpress GST Overdraft)
  • Product-Specific Documents
    • For Overdraft Against Property: Title deed, Approved plan, Property tax receipts, Encumbrance certificate, NOC from society (if applicable)
    • For Overdraft Against Fixed Deposit: FD receipt or account statement
    • For Dukandar Overdraft: 12 months' bank statements showing business transactions
    • For Professionals (Dropline OD): Professional qualifications (e.g., medical council registration for doctors, ICAI certificate for CAs)
  • Application Form
    • Duly filled and signed loan application form (available online or at HDFC Bank branches)
    • Passport-size photographs of the applicant

Factors for HDFC Bank Business Loan Overdraft (OD)

  • Creditworthiness of the Applicant: A CIBIL score of 700 or above is preferred for unsecured OD facilities. No defaults or late payments on existing loans or credit cards. The bank assesses the applicant's ability to manage additional debt.
  • Business Profile and Stability: Minimum of 3 years of continuous operation for most OD facilities. The nature of the business determines product suitability. Stable and consistent cash flow supports repayment capacity.
  • Financial Documentation: ITR for last 2-3 years shows financial health. 12 months' bank statements reflect transaction volume and cash flow. GST returns validate business activity and turnover.
  • Collateral (for Secured OD): For Overdraft Against Property, ownership of property free of legal disputes is key. For Overdraft Against FD, an active FD with HDFC Bank secures up to 90% of its value.
  • GST Compliance: Regular and timely GST filings are mandatory for Xpress GST Overdraft. Consistent filings validate business activity and turnover for other facilities.
  • Loan Amount and Purpose: The requested OD limit must align with business turnover and repayment capacity. Clear articulation of purpose (working capital, expansion etc.) strengthens application.
  • Banking Relationship: Existing HDFC Bank customers may receive pre-approved offers or faster processing. Long-term relationship with regular transactions improves approval chances.
  • Interest Rates and Fees: Rates range from 10.75% to 25% per annum based on credit profile and product type. Processing fees up to 2% of loan amount + GST.
  • Repayment Capacity: The bank evaluates ability to pay interest on utilized amount. For Dropline OD, the reducing limit structure requires disciplined financial management.
  • Applicant's Profile: Age must be 21-65 years at loan maturity. Should be business owner/partner/director with authority to apply. Professional qualifications required for some products.

Frequently Asked Questions (FAQs)

What is a Business Loan Overdraft (OD)?
A Business Loan Overdraft is a credit facility offered by HDFC Bank that allows businesses to withdraw funds up to a sanctioned limit from their current account. Interest is charged only on the amount utilized, not the entire limit, making it a flexible and cost-effective solution for managing working capital, cash flow, or business expenses.
What types of Business Loan OD facilities does HDFC Bank offer?
HDFC Bank provides several OD facilities tailored to different business needs:
  • Dukandar Overdraft: For retailers, shopkeepers, and wholesalers (up to ₹10 lakh, collateral-free).
  • Xpress GST Overdraft: For MSMEs with regular GST filings (up to ₹50 lakh, collateral-free).
  • Dropline Overdraft: For manufacturers, traders, and professionals (₹1 lakh to ₹25 lakh, collateral-free).
  • Overdraft Against Property: For businesses with property to pledge (up to ₹10 crore, secured).
  • Overdraft Against Fixed Deposit: For FD holders (up to 90% of FD value, secured).
  • Smartdraft (Salary Plus OD): For salary account holders with pre-approved offers (limit varies).
Who is eligible for HDFC Bank’s Business Loan OD?
Eligibility varies by facility but generally includes:
  • Business Type: Proprietors, partnerships, private limited companies, or self-employed professionals in manufacturing, trading, retail, or services.
  • Business Vintage: Minimum 3 years of operation (except for Overdraft Against FD and Smartdraft).
  • Turnover: Minimum ₹40 lakh annually (lower for Dukandar Overdraft, subject to bank discretion).
  • Age: Applicant must be 21–65 years at loan maturity.
  • Credit Score: Preferably 700+ for unsecured facilities.
Specific Requirements:
  • Dukandar Overdraft: Retail/wholesale business with 12 months’ bank statements.
  • Xpress GST Overdraft: Regular GST filings with no delays beyond 20 days.
  • Overdraft Against Property: Ownership of residential/commercial property.
  • Overdraft Against FD: Active FD of at least ₹25,000 with 6 months and 1 day tenure.
What documents are required to apply for a Business Loan OD?
General documents include:
  • Identity/Address Proof: PAN card, Aadhaar, voter ID, passport, or driving license.
  • Business Proof: GST registration, trade license, partnership deed, or company incorporation certificate.
  • Financial Documents: ITR and balance sheet for 2 years, 12 months’ bank statements, GST returns for 12 months.
Product-Specific Documents:
  • Xpress GST Overdraft: GST returns with no delays.
  • Overdraft Against Property: Property documents (title deed, approved plan, tax receipts, encumbrance certificate).
  • Overdraft Against FD: FD receipt or account statement.
  • Dropline OD: Professional qualifications for doctors/CAs.
  • Smartdraft: Minimal documents for pre-approved salary account holders.
How can I apply for a Business Loan OD?
You can apply through:
  • Online: Visit www.hdfcbank.com, go to SME Banking > Working Capital > Overdraft Facilities. Select the OD product, check eligibility, fill the application form, and upload documents.
  • Branch: Visit an HDFC Bank branch, consult a relationship manager, and submit the application form with documents.
  • NetBanking (for Overdraft Against FD or Smartdraft): Apply via the “Offers” section for pre-approved facilities. Approval and disbursal may take a few hours to days, with instant disbursal (10 seconds) for pre-approved customers.
What is the loan amount I can get with a Business Loan OD?
Loan amounts vary by facility:
  • Dukandar Overdraft: Up to ₹10 lakh.
  • Xpress GST Overdraft: Up to ₹50 lakh (₹1 crore in select cases).
  • Dropline Overdraft: ₹1 lakh to ₹25 lakh.
  • Overdraft Against Property: Up to ₹10 crore.
  • Overdraft Against Fixed Deposit: Up to 90% of FD value (minimum FD ₹25,000).
  • Smartdraft: Varies based on pre-approved offer.
What is the interest rate for Business Loan OD?
Interest rates range from 10.75% to 25% per annum, depending on:
  • Credit score and repayment history.
  • Secured (lower rates) vs. unsecured facility.
  • Business profile and market conditions.
Interest is calculated daily on the utilized amount and billed monthly.
Are there any fees or charges for Business Loan OD?
Yes, common charges include:
  • Processing Fees: Up to 2% of the loan amount + GST (nil for loans up to ₹5 lakh for micro/small enterprises with URC submission).
  • Renewal Fees: ₹250 + taxes for facilities like Smartdraft.
  • Prepayment Charges: Nil for fixed-rate loans up to ₹50 lakh for micro/small enterprises; 2–4% for others after 12 EMIs.
  • No Commitment Charges: No fees on unused OD limit for most facilities.
  • Late Payment: Interest on unpaid amounts is added to the principal, impacting future interest calculations.
Do I need collateral for a Business Loan OD?
  • Collateral-Free: Dukandar Overdraft, Xpress GST Overdraft, and Dropline Overdraft do not require collateral (up to ₹50 lakh, or ₹75 lakh in select locations).
  • Secured: Overdraft Against Property requires residential, commercial, or industrial property as collateral. Overdraft Against FD is secured against an active FD.
What is the tenure of a Business Loan OD?
  • Unsecured Facilities: (e.g., Dropline OD): 12 to 48 months.
  • Secured Facilities: (e.g., Overdraft Against Property): Tenure varies, often renewable.
  • Dukandar/Xpress GST Overdraft: Auto-renewal options available, allowing businesses to continue or opt out.
  • Overdraft Against FD: Linked to FD tenure, renewable upon FD renewal.

List OF HDFC Business Loan OD Banks

  • HDFC Bank Dukandar Overdraft
  • HDFC Bank Xpress GST Overdraft
  • HDFC Bank Overdraft Against Property
  • HDFC Bank Dropline Overdraft
  • HDFC Bank Overdraft Against Fixed Deposit
  • HDFC Bank Smartdraft (Salary Plus OD)