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Key Features of IndusInd Bank Business Loan Overdraft (OD) Facility

  • Flexible Loan Amounts:
    • Minimum Limit: Starts at ₹2 lakh
    • Maximum Limit: Up to ₹50 crore for secured OD and ₹50 lakh for unsecured OD
    • Drop-line Overdraft option with reducing limit for structured repayment
  • Secured and Unsecured Options:
    • Unsecured OD available up to ₹50 lakh with no collateral required
    • Secured OD against shares, mutual funds, bonds or property for higher limits
    • Up to 80% of pledged securities' value can be availed
  • Competitive Interest Rates:
    • Interest rates starting from 11.25% p.a. for secured OD
    • Interest charged only on amount utilized and for duration used
    • No prepayment charges for most OD facilities
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  • No Prepayment or Non-Usage Charges: No prepayment charges for repaying the overdraft amount, either partially or in full. No penalty for non-usage of the overdraft limit, providing cost efficiency.
  • Collateral-Free for Small Loans: For loans up to ₹50 lakh, no collateral is required, simplifying access to funds for SMEs. For higher amounts, securities like residential, commercial, industrial properties, or liquid securities are accepted.
  • Quick and Easy Application Process: Online application with a streamlined process, including auto-fill options using registered mobile numbers, net banking, or Aadhaar. Video KYC and minimal documentation ensure quick approvals and disbursals, often within 14 working days for loans up to ₹25 lakh and 45 days for higher amounts.
  • Provisional Sanction: Provisional sanction letters are issued upon portfolio verification, followed by assistance from a sales representative to set up the overdraft account.
  • Eligibility Criteria: Self-employed individuals, proprietors, private limited companies, and partnership firms in manufacturing, trading, or services. Minimum turnover of ₹1 crore in the latest financial year, positive PBDT for last 3 years, minimum 3 years of business vintage, age between 21–65 years, no CIBIL defaults, clean 12-month repayment history, and paid-up capital of ₹10 lakh.
  • Documentation: Includes KYC documents (ID, address, signature proof), business proof (GST registration, ITRs, registrations), financial documents (6 months’ bank statements, 3 years’ audited financials, ITRs for loans above ₹50 lakh), and securities-related documents (Demat statements, mutual fund holdings, lien request letter).
  • Additional Features: Single Scrip Lending allows pledging of one or multiple securities. Third-party DP securities accepted for pledging. GST Working Capital Loans provide tailored overdraft facility using GST returns. Loan Against Card Receivables offers limits from ₹5 lakh to ₹300 lakh for businesses like vendors and distributors.
  • No Hidden Charges: Transparent fee structure with upfront communication of processing fees, e.g., 2% of loan amount for loans against property.
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    Benefits of IndusInd Bank Business Loan Overdraft

    • Flexible Fund Access: Withdraw funds as needed up to approved limit to manage cash flow gaps, purchase inventory or cover operational expenses. Multiple withdrawals allowed within the limit.
    • Cost-Effective Interest: Pay interest only on amount utilized, not the entire limit. Competitive rates starting from 11.25% p.a. ensure affordability.
    • No Fixed EMI Burden: Unlike term loans, repay overdrawn amount at your convenience as cash flows permit, without fixed monthly installments.
    • Customizable Loan Structure: Drop-line Overdraft offers a reducing limit over time, combining the flexibility of an OD with structured repayment.
    • No Need to Liquidate Investments: Secured OD allows businesses to pledge securities (e.g., shares, mutual funds, bonds) or property to access funds, preserving investment portfolios while meeting financial needs.
    • Supports Diverse Business Needs: Funds can be used for working capital, business expansion, inventory purchase, meeting short-term obligations, or even personal loans/professional needs, offering versatility.
    • Transparent and Flexible Terms: No hidden charges, with clear communication of processing fees and other costs upfront.
    • Enhanced Financial Management: The overdraft facility provides a revolving credit line, allowing businesses to withdraw, repay, and reuse funds within the approved limit, ensuring continuous liquidity.
    • Minimal Documentation: Simplified documentation requirements, including KYC, business proof, and financials (e.g., 6 months’ bank statements, 3 years’ audited financials), making the application process efficient.
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    How to Apply for IndusInd Bank Business Loan Overdraft

    • 1. Choose the Right OD Scheme
      • Unsecured OD: Up to ₹50 lakh without collateral
      • Secured OD: Against shares, mutual funds, bonds or property (up to ₹50 crore)
      • Drop-line OD: Reducing limit option for structured repayment
      • GST Working Capital Loan: Leverages GST returns
    • 2. Gather Required Documents
      • KYC Documents:
        • PAN card (mandatory)
        • Aadhaar card or other valid ID proof
        • Address proof (utility bill, rental agreement)
      • Business Proof:
        • GST registration (if applicable)
        • Shop Act license or incorporation documents
        • Business PAN card
      • Financial Documents:
        • ITRs for last 3 years
        • Bank statements (6 months)
        • Audited financial statements (3 years)
      • For Secured OD: Demat account statements, mutual fund holdings or property documents
    • 3. Apply Online or Offline
      • Online: Through IndusInd Bank website using auto-fill options with mobile number, net banking or Aadhaar
      • Offline: Visit nearest IndusInd Bank branch with documents
      • Complete Video KYC for online applications
    • 4. Submit Documents and Await Verification
      • Submit completed application with supporting documents
      • Bank will verify details and assess creditworthiness
      • For secured OD, securities valuation will be conducted

    Eligibility Criteria for IndusInd Bank Business Loan Overdraft

    • Applicant Type: Self-employed individuals, proprietors, private limited companies, or partnership firms engaged in manufacturing, trading, or services sectors.
    • Age: Individual applicants or proprietors typically between 21-65 years at loan maturity (relaxed to 21 for second-generation businesses).
    • Business/Operational History: Minimum 3 years of continuous business operations with audited financial statements for verification.
    • Financial Requirements: Minimum annual turnover of ₹1 crore in latest financial year with positive Profit Before Depreciation and Tax (PBDT) for last 3 years.
    • Creditworthiness: No defaults in CIBIL report and clean 12-month repayment track record for loans of at least ₹4 lakh. CIBIL score of 700+ preferred.
    • Paid-up Capital: Minimum ₹10 lakh paid-up capital for the business.
    • For Secured OD: Eligible securities include shares, mutual fund units, bonds (Government, PSU, Sovereign Gold Bonds), or residential/commercial/industrial property.
    • Banking Relationship: Existing relationship with IndusInd Bank is beneficial but not mandatory.
    • Documentation: All KYC, business proof and financial documents must be complete and up-to-date.
    • Regulatory Compliance: Business must comply with all applicable laws and regulations including GST filings if applicable.
    • Annual Growth: The business should demonstrate consistent growth in turnover, profits, or operational scale in the last 2–3 years.
    • Liquidity Requirements: The business must show sufficient cash flow to service debt obligations and meet short-term financial commitments.
    • Financial Ratios: Healthy financial ratios, such as Debt-to-Equity Ratio and Current Ratio, should meet the bank’s criteria for lending.
    • Ownership Structure: The applicant should have full legal ownership of the business or hold at least 51% shares in case of partnerships or companies.
    • Legal Structure of Business: The business should be legally registered, whether as a sole proprietorship, partnership, LLP, or private limited company.
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    Documents Required for IndusInd Bank Business Loan Overdraft

    • KYC Documents:
      • PAN Card (mandatory for all applicants)
      • Aadhaar Card, Passport, Voter ID or Driving License as identity proof
      • Address proof (utility bill not older than 3 months, rental agreement, passport)
      • Recent passport-sized photographs
    • Business Proof:
      • Business PAN card
      • GST registration certificate (if applicable)
      • Shop & Establishment registration certificate
      • Partnership Deed (for partnership firms) or Certificate of Incorporation (for companies)
    • Financial Documents:
      • Income Tax Returns (ITR) for last 3 years showing business income
      • Bank statements for last 6 months from all business accounts
      • Audited financial statements (Profit & Loss, Balance Sheet) for last 3 years
      • For loans above ₹50 lakh: Additional 3 months bank statements and ITR with income computation
    • For Secured OD:
      • Demat account statements (for pledging shares/mutual funds)
      • Statement of mutual fund holdings (if applicable)
      • Lien request letter for securities being pledged
      • Property documents (for OD against property): Title deed, sale agreement, approved building plan

    Factors for IndusInd Bank Business Loan Overdraft

    • Business Type and Structure: Eligibility varies for proprietorships, partnerships, and private limited companies. Established entities may have advantage due to perceived stability.
    • Business Turnover: Minimum ₹1 crore annual turnover required with audited financials for 3 years. Higher turnover increases approval chances and potential limit.
    • Profitability: Positive Profit Before Depreciation and Tax (PBDT) for last 3 consecutive years demonstrates financial health.
    • Business Vintage: Minimum 3 years of continuous operations required. Longer history improves approval odds.
    • Credit History: No CIBIL defaults and clean 12-month repayment track record for loans ≥ ₹4 lakh. Score of 700+ preferred.
    • Type of Overdraft: Unsecured OD (up to ₹50 lakh) has stricter criteria than secured OD (up to ₹50 crore against collateral).
    • Collateral Value: For secured OD, up to 80% of pledged securities' value can be availed. Quality and liquidity of collateral matter.
    • Debt-to-Income Ratio: Lower ratio indicates better repayment capacity and improves terms.
    • Documentation: Complete and accurate KYC, business proof and financial documents speed up processing.
    • Interest Rates: Start at 11.25% p.a. for secured OD. Rates vary based on credit profile, loan amount and collateral.
    • Processing Time: 14 working days for loans up to ₹25 lakh, 45 days for higher amounts with complete documentation.
    • Industry Factors: Businesses in stable sectors may get better terms than volatile industries.

    Frequently Asked Questions (FAQs)

    What is IndusInd Bank Business Loan Overdraft (OD)?
    It's a flexible credit facility allowing businesses to withdraw funds up to an approved limit as needed. Interest is charged only on the amount utilized. It can be secured (against shares, mutual funds, bonds or property) or unsecured (up to ₹50 lakh without collateral).
    Who is eligible for this OD facility?
    Eligibility includes:
    • Self-employed individuals, proprietors, private limited companies or partnership firms
    • Minimum ₹1 crore annual turnover with audited financials for 3 years
    • Positive PBDT for last 3 years
    • Minimum 3 years business operations
    • No CIBIL defaults and clean repayment track record
    What loan amounts are available?
    • Minimum: ₹2 lakh
    • Unsecured OD: Up to ₹50 lakh
    • Secured OD: Up to ₹50 crore (against approved securities)
    • Up to 80% of pledged securities' value can be availed
    What documents are required to apply?
    Key documents include:
    • KYC: PAN, Aadhaar, address proof, photos
    • Business proof: GST, shop license, incorporation documents
    • Financials: 3 years ITR, 6 months bank statements, audited financials
    • For secured OD: Demat statements, mutual fund holdings or property documents
    How can I apply for the OD facility?
    Online:
    • Visit IndusInd Bank website, fill application and upload documents
    • Complete Video KYC
    • Receive provisional sanction after verification
    Offline:
    • Visit branch, submit application and documents
    • Bank representative assists with process
    What is the interest rate?
    • Starting from 11.25% p.a. for secured OD
    • Varies based on credit profile, loan amount and collateral
    • Interest charged only on amount utilized
    Is collateral required?
    • Unsecured OD: No collateral needed for loans up to ₹50 lakh
    • Secured OD: Collateral required for higher limits (shares, mutual funds, bonds or property)
    How long does approval take?
    • Loans up to ₹25 lakh: Within 14 working days with complete documents
    • Higher amounts: Within 45 working days
    • Provisional sanction issued after portfolio verification
    What are the fees and charges?
    • Processing fee: Typically 2% of loan amount (e.g., for loans against property)
    • No prepayment charges for most OD facilities
    • No non-usage charges
    Can I prepay the OD early?
    Yes, you can repay the overdrawn amount anytime without prepayment charges in most cases. For loans against property, a charge of up to 4% may apply after 6 months.
    What can the OD funds be used for?
    Funds can be used for:
    • Working capital requirements
    • Business expansion
    • Inventory purchase
    • Meeting short-term financial needs

    List of IndusInd Bank Business Loan Overdraft Products

    • IndusInd Bank Business Loan Overdraft (Unsecured)
    • IndusInd Bank Business Loan Overdraft (Secured)
    • IndusInd Bank Drop-line Overdraft
    • IndusInd Bank GST Working Capital Loan
    • IndusInd Bank Loan Against Card Receivables
    • IndusInd Bank OD Against Shares
    • IndusInd Bank OD Against Mutual Funds
    • IndusInd Bank OD Against Bonds
    • IndusInd Bank OD Against Property
    • IndusInd Bank Professional Overdraft