Business Overdraft (OD) Loan | Dukandar Overdraft Facility

Business Overdraft (OD) Loan | Dukandar Overdraft Facility

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A Business Overdraft (OD) Loan is a financial product designed to offer businesses immediate liquidity when cash flow is tight. It works like a credit line, where the business can withdraw more money than available in its bank account, up to a pre-agreed limit. This facility is particularly beneficial for small businesses and retailers who face fluctuations in cash flow but need to meet immediate expenses such as inventory purchase, payroll, or operational costs.

Banks provide overdraft loans on both secured and unsecured bases, depending on the creditworthiness of the borrower. One of the key advantages of this loan is its flexibility. Unlike traditional loans, where interest is charged on the entire borrowed amount, in an overdraft loan, interest is calculated only on the amount that is utilized, not the entire limit.

The Business Overdraft (OD) Loan is especially useful for seasonal businesses, wholesalers, or retailers facing cyclical cash flow issues. With this facility, they can continue operations smoothly even during lean periods without worrying about day-to-day expenses. However, it is important for businesses to use this facility judiciously and not rely on it long-term, as interest rates can be higher compared to regular loans.

A Business Overdraft Loan provides an accessible financial cushion, offering flexibility to businesses that require short-term capital without going through the hassle of applying for a full-fledged loan every time they face a cash crunch.