Overdraft (OD) Facility Guidance
A flexible borrowing facility that lets you manage short-term cash flow gaps.
Overview
An overdraft allows you to withdraw more than your account balance up to an agreed limit. Interest is charged only on the amount used, making it suitable for managing temporary shortfalls.
Key considerations
- Business vintage
- Consistent banking history
- Collateral or security (varies by lender)
- GST filings
Typical eligibility
These are indicative criteria. Actual requirements vary by lender.
- Business vintage
- Consistent banking history
- Collateral or security (varies by lender)
- GST filings
Typical documents
Document requirements vary by lender and loan type.
- Business registration
- Bank statements (12 months)
- GST returns
- Financial statements
- Collateral documents if applicable
Frequently asked questions
How is OD different from a term loan?
In an OD, you only pay interest on the amount you use, and you can deposit and withdraw flexibly. A term loan gives you a fixed amount repaid via EMIs.
What security is needed?
ODs may be secured against property, FDs, or receivables. Some lenders offer clean ODs based on banking history. Requirements vary.
Your next step
Ready to explore Overdraft (OD)?
Share your requirement and a SMFINCARE financing specialist will help you understand what to prepare.
This assessment is indicative and educational. It does not constitute a sanction, approval, credit decision or guarantee. Final eligibility, interest rate, loan amount, documentation and disbursement are determined by the relevant lender according to its policies and applicable law.