Running a small business often comes with unexpected expenses and cash flow challenges. Whether it’s paying suppliers, covering salaries, or managing seasonal demand, entrepreneurs sometimes need quick access to funds. That’s where a small overdraft loan for business becomes a lifesaver.
In this blog, we’ll explain what a business overdraft loan is, its benefits, eligibility, and how NBFCs like Tata Capital and Bajaj Finserv provide quick overdraft solutions for small businesses.
What is a Small Overdraft Loan for Business?
A business overdraft loan is a credit facility offered by banks and NBFCs that allows business owners to withdraw more money than what is available in their current account, up to a pre-approved limit.
- Loan Amount: Small overdraft loans usually start from ₹50,000 and can go up to ₹10 lakhs.
- Interest Charged: Only on the amount you actually use, not the full limit.
- Tenure: Flexible, often renewable annually.
- Purpose: Ideal for working capital, short-term expenses, or emergency needs.
Key Benefits of Small Overdraft Loan for Business
- Instant Access to Funds – Same-day approvals available with leading NBFCs.
- Flexible Repayment – Pay interest only on the utilized amount.
- No Fixed EMIs – Unlike term loans, you repay as per usage.
- Keeps Cash Flow Stable – Helps in managing delayed customer payments.
- Unsecured Options – Salaried professionals and small business owners can get an overdraft without collateral (depending on profile).
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Eligibility for Business Overdraft Loan
- Applicant must be self-employed, a business owner, or a professional.
- Business vintage: At least 1–2 years in operation.
- CIBIL score: Generally 700+ for unsecured overdrafts.
- Documents required: KYC, bank statements, business proof, GST returns.
Top Providers of Small Overdraft Loans in India
- Tata Capital Business Overdraft – Flexible credit with competitive interest rates.
- Bajaj Finserv Overdraft Facility – Same-day approval, ideal for SMEs.
- ICICI Bank OD for Business – Secured and unsecured options.
- HDFC Bank Smart OD – Easy overdraft for small enterprises.
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When Should You Opt for a Small Overdraft Loan?
- To cover working capital gaps.
- During seasonal demand fluctuations.
- For emergency payments like rent, salaries, or urgent purchases.
- When customers delay payments and you need cash flow stability.
Conclusion
A small overdraft loan for business is one of the most flexible funding solutions for small enterprises. Unlike traditional business loans, you don’t need to pay fixed EMIs — you only pay interest on what you use.NBFCs like Tata Capital and Bajaj Finserv make it even easier by offering quick approval and minimal documentation. If you are a small business owner looking for instant liquidity, a business overdraft facility is a smart choice.
