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Key Features of Citibank Business Loan Overdraft (OD) Facility

  • Overdraft/Cash Credit:
    • Provides a line of credit to manage day-to-day cash flow needs, allowing businesses to withdraw funds up to an approved limit as needed.
    • Interest is charged only on the utilized amount, making it cost-effective for fluctuating financial requirements.
  • Dropline Overdraft:
    • A unique hybrid of term loan and overdraft, combining the flexibility of an overdraft with structured repayment.
    • The limit reduces over time, offering both accessibility and a repayment schedule. Interest is charged only on the amount utilized.
  • Attractive Interest Rates:
    • Overdrafts are offered at competitive rates, often linked to the Marginal Cost of Funds based Lending Rate (MCLR) or Alternate Reference Rate (ARR).
    • Rates vary based on the applicant’s business profile, financial history, and loan tenure.
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  • Secured and Unsecured Options: Overdrafts can be secured against assets like property, stock, or book debts, with up to 80% of collateral value offered for property-backed facilities. Unsecured overdrafts are also available based on creditworthiness.
  • Short-Term Demand Loans as Sub-Limit: Overdrafts may include short-term demand loans (up to 6 months) as a sub-limit, providing additional flexibility for immediate funding needs.
  • Foreign Currency and INR Options: Overdraft facilities are available in Indian Rupees (INR) and foreign currencies, catering to businesses with international transactions.
  • Flexible Repayment: No prepayment penalties for overdrafts, allowing businesses to repay at their convenience without fixed EMI structures. Repayments are credited against the overdraft balance, reducing interest costs.
  • Quick Processing: Minimal documentation and fast approval processes, with loans potentially disbursed within 48 hours for eligible applicants.
  • Loan Amount Range: Overdraft limits range from ₹10 lakh to ₹15 crore, depending on the business’s financial profile and collateral provided.
  • Processing Fees: A processing fee of up to 2% of the loan amount may apply, along with potential renewal fees (2%) and pre-closure charges (2%–4%).
  • Eligibility and Documentation: Requires a Citibank business checking account and in-person application at a branch. Standard KYC documents, financial statements, and income tax returns for at least two years are needed. The overdraft limit is determined by the value of securities and margin criteria.
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Benefits of Citibank Business Loan Overdraft

  • Flexible Fund Access: Overdraft allows businesses to withdraw funds up to an approved limit as needed, providing flexibility to address immediate cash flow requirements without fixed withdrawal schedules.
  • Interest on Utilized Amount: Interest is charged only on the amount withdrawn, not the entire sanctioned limit, reducing borrowing costs compared to traditional term loans.
  • Cost-Effective Working Capital Management: Ideal for managing daily operational expenses, inventory purchases, or unexpected shortfalls, ensuring smooth business operations.
  • No Prepayment Penalties: Businesses can repay the overdraft balance at any time without penalties, offering flexibility to reduce interest costs when surplus funds are available.
  • Dropline Overdraft Advantage: Combines overdraft flexibility with a structured repayment plan, reducing the limit over time, which helps businesses manage debt while retaining access to funds.
  • Secured and Unsecured Options: Secured overdrafts offer higher limits (up to 80% of collateral value), while unsecured options suit businesses with strong credit profiles, minimizing asset pledging.
  • Foreign Currency Support: Availability in INR and foreign currencies facilitates international transactions, benefiting businesses with global operations.
  • Quick Disbursal: Fast approval and disbursal (as quick as 48 hours for eligible applicants) ensure timely access to funds for urgent needs.
  • High Loan Limits: Overdraft limits range from ₹10 lakh to ₹15 crore, catering to businesses of varying sizes and financial needs.
  • Customizable Sub-Limits: Includes short-term demand loans (up to 6 months) as a sub-limit, providing additional flexibility for specific short-term funding requirements.
  • Minimal Documentation: Streamlined application process with standard KYC, financial statements, and income tax returns, reducing paperwork hassles.
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How to Apply for Citibank Business Loan Overdraft

  • 1. Check Eligibility
    • A registered MSME or business entity (proprietorship, partnership, private limited company, etc.)
    • Minimum business vintage of 2–3 years
    • Must hold or open a Citibank business checking account
    • Good credit history and financial stability
    • For secured overdrafts, collateral such as property, stock, or receivables must be available
  • 2. Gather Required Documents
    • KYC Documents:
      • PAN card
      • Aadhaar or other valid identity/address proofs for the business and proprietors/partners/directors
    • Business Documents:
      • Business registration certificate
      • GST certificate
      • Partnership deed or Memorandum of Association, as applicable
    • Financial Documents:
      • Audited balance sheets and profit & loss statements for the last 2–3 years
      • ITRs for at least 2 years
      • Bank statements for the last 6–12 months
    • Collateral Documents (for secured OD):
      • Property deeds
      • Stock statements
      • Receivables information
    • Additional documents may be requested based on loan amount or business type
  • 3. Visit a Citibank Branch
    • Locate the nearest branch via Citibank’s official website
    • Alternatively, contact customer service at 1860 210 2484 (local charges apply) or +91 22 4955 2484 (from outside India)
    • Schedule an appointment with a Citibank business banking officer
  • 4. Submit Application
    • Complete the business loan overdraft application form provided by the branch
    • Attach all required documents
    • Specify whether you're applying for a secured or unsecured OD
    • Indicate any specific features needed (e.g., dropline OD or foreign currency facility)
  • 5. Loan Assessment
    • Citibank evaluates your application based on:
      • Business financials and creditworthiness
      • Collateral value (for secured OD)
      • Cash flow and repayment capacity

Eligibility Criteria for Citibank Business Loan Overdraft

  • Business Type: Registered business entities, including:
    • Sole Proprietorships
    • Partnerships
    • Private Limited Companies
    • Limited Liability Partnerships (LLPs)
    • Other MSME entities recognized under Indian regulations
    Businesses engaged in manufacturing, trading, or services are typically eligible.
  • Business Vintage: Minimum operational history of 2–3 years, with verifiable financial records. Startups may face stricter scrutiny or require additional collateral/guarantees.
  • Citibank Business Account: Applicants must hold or open a Citibank business checking account to facilitate overdraft disbursal and transactions.
  • Financial Requirements:
    • Stable and verifiable revenue stream, demonstrated through audited financial statements or Income Tax Returns (ITR) for at least 2 years.
    • Positive cash flow and profitability are preferred to ensure repayment capacity.
    • Minimum annual turnover requirements may apply (specific thresholds not publicly disclosed but typically aligned with MSME standards).
  • Creditworthiness: Good credit history for the business and its proprietors/partners/directors. CIBIL score (or equivalent) of 700 or above is generally preferred for unsecured overdrafts. No recent defaults or bankruptcy filings.
  • Collateral (for Secured OD): For secured overdrafts, acceptable collateral includes:
    • Residential or commercial property (up to 80% of market value)
    • Stock, book debts, or receivables
    • Other approved securities as per Citibank’s policy
    Unsecured overdrafts may be offered to businesses with strong financials and credit profiles, subject to stricter evaluation.
  • Age of Applicant: Primary applicant (proprietor, partner, or director) should typically be between 21 and 65 years at the time of application.
  • Documentation: Valid KYC documents for the business and applicants (e.g., PAN, Aadhaar, passport). Business registration documents (e.g., GST certificate, partnership deed, Certificate of Incorporation).
    • Audited balance sheets and profit & loss statements for 2–3 years
    • ITR for at least 2 years
    • Bank statements for the last 6–12 months
    • Collateral-related documents (if applicable), such as property deeds or stock statements
  • Location: Business must operate in a city where Citibank has a branch, as applications require in-person submission.
  • Purpose of Overdraft: Funds must be used for legitimate business purposes, such as working capital, inventory purchase, or operational expenses. Speculative or non-business use is not permitted.
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Documents Required for Business Loans Overdraft (OD)

  • KYC Documents (for Business and Applicants):
    • Business KYC:
      • PAN card of the business entity.
      • GST registration certificate (if applicable).
      • Business registration proof (e.g., Certificate of Incorporation for companies, Partnership Deed for partnerships, Shop & Establishment License for proprietorships).
      • Udyam Registration Certificate (for MSMEs, if applicable).
    • Individual KYC (for proprietors, partners, or directors):
      • PAN card.
      • Aadhaar card or other government-issued ID (e.g., passport, voter ID, driving license).
      • Address proof (e.g., utility bill, rental agreement, or Aadhaar).
      • Recent passport-sized photographs.
  • Business Documents:
    • Memorandum of Association (MOA) and Articles of Association (AOA) for private limited companies.
    • Partnership Deed (for partnership firms).
    • Board resolution or authority letter for loan application (for companies or LLPs).
    • List of directors/partners with shareholding pattern.
    • Business PAN and TAN allotment letter.
  • Financial Documents:
    • Audited financial statements for the last 2–3 years, including:
      • Balance Sheet.
      • Profit & Loss Statement.
    • Income Tax Returns (ITR): For the business and proprietors/partners/directors for at least 2 years.
    • Bank statements: For the business’s primary account (last 6–12 months).
    • Projected cash flow or business plan: If requested, especially for higher limits.
    • Details of existing loans or liabilities: If any, including sanction letters and repayment schedules.
    • GST returns: For the last 6–12 months (optional but recommended for turnover verification).
  • Collateral Documents (for Secured Overdraft):
    • Property documents (for property-backed OD):
      • Title deed.
      • Sale agreement.
      • Property tax receipts.
      • Approved building plan or occupancy certificate.
      • No Objection Certificate (NOC) from relevant authorities.
    • Stock and book debt statements (for inventory/receivables-backed OD):
      • Stock valuation report.
      • List of receivables with aging details.
      • Latest debtor and creditor list (if available).
      • Valuation report or appraisal documents for collateral (may be arranged by Citibank during processing).
  • Application-Specific Documents:
    • Duly filled and signed Citibank Business Loan Overdraft application form (provided at the branch).
    • Statement of purpose for the overdraft (e.g., working capital, inventory purchase).
    • For foreign currency OD, additional documents like export/import licenses or trade agreements may be required.
    • Client contracts or invoices (for service-based businesses, if applicable).
  • Additional Requirements:
    • Proof of Citibank business checking account (or application for opening one, as it’s mandatory).
    • Any other documents requested by Citibank during the evaluation (e.g., industry-specific licenses, client contracts).

Factors for Business Loans Overdraft (OD)

  • Business Profile and Type: Nature of Business: Citibank caters to MSMEs and other business entities such as sole proprietorships, partnerships, private limited companies, and LLPs. The industry you operate in (e.g., manufacturing, trading, services) impacts approval. Stable and regulated industries are often viewed favorably.
    Business Vintage: A minimum operational history of 2–3 years is typically required to demonstrate stability and repayment capacity. Newer businesses or startups may face stricter scrutiny or need to provide collateral or guarantors.
    Reputation and Market Standing: Businesses with a strong market presence, consistent client base, or reputable brand image are more likely to secure favorable terms. Citibank may evaluate your business’s goodwill or client contracts.
    Legal Compliance: The business must be legally registered and compliant with applicable regulations (e.g., GST, industry-specific licenses). Non-compliance can lead to rejection.
  • Financial Health and Performance: Revenue and Profitability: Citibank assesses your business’s annual turnover and profitability through audited financial statements (balance sheet, profit & loss) for 2–3 years. A steady or growing revenue stream signals repayment capacity.
    Cash Flow: Positive and predictable cash flow is critical, as overdrafts are used for working capital. Citibank may analyze bank statements (last 6–12 months) to evaluate cash inflows and outflows.
    Debt-to-Income Ratio: Existing loans or liabilities are scrutinized. A high debt burden relative to income may lower your overdraft limit or lead to rejection.
    Income Tax Returns (ITR): ITRs for at least 2 years (for the business and proprietors/partners/directors) are mandatory to verify taxable income and financial discipline.
    Projected Financials: For larger overdraft limits, Citibank may request a business plan or projected cash flow to assess future repayment ability.
  • Creditworthiness: CIBIL Score: A credit score of 700 or above (for the business and key individuals) is typically preferred, especially for unsecured overdrafts. A lower score may require collateral or result in higher interest rates.
    Credit History: No recent defaults, missed payments, or bankruptcy filings should appear in your credit report. A clean repayment history with other lenders strengthens your application.
    Credit Utilization: High utilization of existing credit facilities (e.g., credit cards, loans) may signal financial strain, reducing approval chances.
    Guarantor Credit (if applicable): If a guarantor is involved, their credit profile is also evaluated.
  • Collateral (for Secured Overdraft): Type of Collateral: Acceptable assets include:
    Property: Residential or commercial property (up to 80% of market value).
    Stock and Receivables: Inventory or book debts with verifiable value.
    Other Securities: Fixed deposits or other bank-approved assets.
    Valuation and Ownership: Collateral must be legally owned, free of disputes, and professionally valued. Citibank may conduct appraisals to determine the loan-to-value (LTV) ratio.
    Documentation: Clear title deeds, tax receipts, and NOCs are required for property, while stock statements or receivable aging reports are needed for inventory-based ODs.
    Unsecured Overdraft: Businesses with exceptional financials and credit scores may qualify for unsecured ODs, but these typically have lower limits and stricter criteria.
  • Purpose of the Overdraft: Legitimate Business Use: The overdraft must be used for working capital needs, such as:
    Inventory or raw material purchases.
    Meeting operational expenses (e.g., salaries, rent).
    Bridging cash flow gaps or seasonal fluctuations.
    Short-term demand loans for specific projects.
    Prohibited Uses: Funds cannot be used for speculative purposes (e.g., stock market investments) or non-business activities.
    Clarity of Purpose: A clear explanation of how the overdraft will support business growth or stability strengthens your application. For example, a plan to use funds for bulk inventory purchases to meet a large order can justify the request.
  • Banking Relationship with Citibank: Citibank Business Account: A mandatory requirement is holding or opening a Citibank business checking account. This facilitates overdraft disbursal, repayments, and monitoring.
    Existing Relationship: Businesses with a long-standing relationship (e.g., savings accounts, fixed deposits, or other loans) may receive preferential treatment, such as faster processing or better terms.
    Transaction History: Regular transactions through the Citibank account demonstrate financial activity and reliability.

Frequently Asked Questions (FAQs)

What is a Citibank Business Loan Overdraft (OD)?
A business loan overdraft is a flexible credit facility allowing businesses to withdraw funds up to an approved limit to manage working capital or operational needs. Interest is charged only on the utilized amount, not the entire limit.
Who is eligible for a Citibank Business Loan OD?
Eligible applicants include registered MSMEs or businesses (proprietorships, partnerships, private limited companies, LLPs) with:
  • Minimum 2–3 years of operational history.
  • Stable revenue and good credit history (CIBIL score of 700+ preferred).
  • A Citibank business checking account.
  • Collateral for secured ODs or strong financials for unsecured ODs.
What types of overdraft facilities does Citibank offer?
  • Standard Overdraft/Cash Credit: For day-to-day cash flow needs.
  • Dropline Overdraft: Combines overdraft flexibility with a reducing limit over time.
  • Secured Overdraft: Backed by property, stock, or receivables (up to 80% of collateral value).
  • Unsecured Overdraft: Based on creditworthiness, no collateral required.
  • Foreign Currency OD: For businesses with international transactions.
What is the loan amount for a Citibank Business OD?
Overdraft limits range from ₹10 lakh to ₹15 crore, depending on the business’s financial profile, collateral value, and credit assessment.
What are the interest rates for Citibank Business OD?
Interest rates are competitive and linked to the Marginal Cost of Funds based Lending Rate (MCLR) or Alternate Reference Rate (ARR). Exact rates depend on the applicant’s profile, collateral, and market conditions. Contact a Citibank branch for specifics.
What documents are required to apply for a Business OD?
  • KYC: PAN, Aadhaar, or other ID/address proofs for the business and applicants.
  • Business Documents: Registration certificate, GST certificate, partnership deed, or MOA/AOA.
  • Financials: Audited financial statements, ITR for 2–3 years, bank statements (6–12 months).
  • Collateral Documents (for secured OD): Property deeds, stock statements, or receivable details.
A complete list is provided at the branch during application.
How can I apply for a Citibank Business Loan OD?
Applications must be submitted in person at a Citibank branch:
  • Open or hold a Citibank business checking account.
  • Gather required documents.
  • Visit a branch, fill out the application form, and submit documents.
  • Undergo evaluation, with disbursal typically within 48 hours for approved cases.
Is collateral mandatory for a Business OD?
No, unsecured overdrafts are available for businesses with strong financials and credit scores. Secured overdrafts (backed by property, stock, or receivables) offer higher limits and lower rates.
What are the fees associated with a Citibank Business OD?
  • Processing Fee: Up to 2% of the loan amount.
  • Renewal Fee: Up to 2% for annual renewals.
  • Pre-closure Charges: 2%–4% if closed early (subject to terms).
Exact fees vary and are confirmed during approval.
How is the overdraft limit determined?
The limit is based on:
  • Business financials (revenue, profitability, cash flow).
  • Collateral value (up to 80% for property).
  • Credit score and repayment history.
  • Turnover and operational needs.
Can I prepay or reduce the overdraft balance?
Yes, there are no prepayment penalties. You can deposit surplus funds to reduce the utilized balance, lowering interest costs.
How long does it take to get a Business OD approved?
Approval and disbursal can take as little as 48 hours for eligible applicants with complete documentation, though complex cases may take longer.

List of Citi Bank Business Loan OD

  • Standard Overdraft/Cash Credit
  • Dropline Overdraft
  • Secured Overdraft
  • Unsecured Overdraft
  • Foreign Currency Overdraft