Overdraft for legal entities is the minimum amount of provision. Offers from banks
Overdraft is becoming increasingly popular among all categories of bank customers. The specifics of the financial and economic activities of the enterprise makes overdraft a particularly attractive banking service for legal entities.
Overdraft - what is it in simple words
The overdraft loan got its name from the English word overdraft, translated as over the plan, overspending. The purpose of the loan in the form of an overdraft is to ensure that the client conducts debit transactions on the current account in case of a lack of own funds. The bank lends to the borrower, helping him to overcome the so-called cash gap, the excess of expenses on the account over receipts. The size of such a daily loan is exactly equal to the amount of the missing funds in the account.
Key overdraft parameters
Like any other loan, an overdraft has three main characteristics: amount, term and interest rate.
The amount of an overdraft loan is understood as its limit. The overdraft limit is the maximum amount of borrowed funds provided by the bank to the client under the overdraft agreement. The amount of the limit depends on the cleared receipts to the account of the legal entity during a certain period. Net income reflects primarily revenue from the core business and does not include loans and borrowings received, income from the sale of securities, replenishment of the company's account at the expense of cash and accounts opened with other banks and other cash flows that are not related to the borrower's core business activities. The bank has its own limit for each client. Standard range: 40-50% of average monthly receipts 3 months before the date of service.
The overdraft term includes two parameters:
- The period during which the bank provides an overdraft loan to a legal entity, according to the concluded agreement, for example, 12 months.
- The maximum interval for which the arisen debt must be fully repaid (both its body and interest), for example, 30 calendar days.
The overdraft interest rate is set individually and depends on the account turnover, availability and type of collateral, etc. The rate can be changed by the bank as the client uses the product.
Advantages of an overdraft over other types of loans for legal entities
The main advantage of an overdraft loan is its ease of use. The company uses exactly the amount of borrowed funds, which it does not have enough to pay for expenditure documents at the end of the operating day. The client's account has a certain reserve (overdraft limit) to go negative. Not a single, even the most flexible credit line can provide such a mode of account functioning.
The second advantage of an overdraft facility is that it is usually provided without collateral. The bank is insured by client turnovers on the account. In some cases, the bank may require the guarantee of individuals who own the organization.
How does an overdraft work?
The overdraft is activated as soon as the client's account does not have enough funds to process payment orders. The maximum credit support is limited by the overdraft limit. The next day, the arisen loan debt is repaid by current receipts. Interest is usually charged at the end of the month or other agreed period.
Legal entities, clients of Nevsky Bank, have the opportunity to open an overdraft facility with the most optimal conditions suitable for the client to conduct his business. The limit and duration of the overdraft, the interest rate, the requirements for the borrower - all this characterizes the bank's offer for lending in the form of an overdraft as one of the most attractive in the banking market.
In this article, we will look at what an overdraft is, who benefits from overdraft loans, as well as what features a technical overdraft involves and what overdraft conditions are offered by domestic banks. Read more about this and what to consider when applying for an overdraft and what to do when there is nothing to repay it, read on.
What is an overdraft
An overdraft is a short-term loan that needs to be repaid quickly. For legal entities, an overdraft means an excess of expenses over the balance of funds in the account, while the overspending is at the disposal of the client. As a rule, the issuance of an overdraft for legal entities is provided if they have a bank account.
Overdraft for legal entities is provided according to the following scheme. In particular, the company needs an urgent transfer of funds to a legal entity for some kind of payment. There are not enough funds in the current account for this. But at the same time, the current account is actively used, payments are regularly received on it.
Check your partners urgently!
Do you know that tax authorities during verification can cling to any suspicious fact about the counterparty? Therefore, it is very important to check those with whom you work. Today, you can get free information about past inspections of your partner, and most importantly, get a list of identified violations!
In such cases, the bank provides the client with an amount that is not enough to make a payment - this is the overdraft service. The client of the bank makes a transfer, although he does not have a sufficient amount in the account. But after the receipt of funds to the account, the bank will collect from them the amount due and interest for using the service.
Why does a legal entity need an overdraft?
The commercial activity of any enterprise today is unthinkable without interaction with the bank. This includes placing bank accounts of legal entities, making settlements with counterparties on non-cash transactions, paying salaries to employees, receiving loans, etc. The company's funds are constantly in motion. There may be situations when the company has fulfilled the client's order, but he has not yet transferred the money. But the company at this point needs to transfer money to a third party. An overdraft might be the solution.
The overdraft is designed to maintain the solvency of a legal entity, replenishing working capital if necessary. Thanks to this loan, the owner of the enterprise gets the opportunity to fulfill the obligations of the organization in a timely manner, in order to maintain its reputation.
Overdraft as a method of optimizing the capital structure
Ekaterina Slabodkina, CFO, Saga Group, Moscow
To make a decision on the need to obtain a loan from a bank or develop only at your own expense, we first compare the profitability of each option. The simplest course of action is to use the founders' money. But such a solution is not always possible. Therefore, you should think about other options for raising funds.
The first solution is the traditional way - bank loans are attracted for operations. For this, not ordinary bank lending to the company is used, but the most cost-effective tools - obtaining short-term and long-term loans, overdrafts, revolving credit lines.
The second solution is more complicated - the regulation of the company's settlements with its counterparties. It is supposed to work with operating leverage - based on a reasonable ratio of receivables and payables. For example, during the season of low demand for our products, it is more profitable to provide a long delay for counterparties in payment, at the same time we are trying to achieve the maximum delay in the purchase of the necessary raw materials. As a result, it is possible to minimize downtime in production and sales, and at the same time we are not forced to bear additional costs for the storage of finished products. At the peak of sales, we radically change our financial policy - we sell products on an advance payment or payment with a minimum delay.
Overdraft types
There are several types of overdraft for legal entities:
1. Standard or classic.
2. Overdraft in advance. It is provided for reliable bank customers, focused on attracting cash and settlement services.
3. Technical overdraft. It can be provided to clients against guaranteed receipts issued to their account, without taking into account the financial condition.
4. Overdraft for collection. Provided for customers if their current account credit turnover consists of 75% or more of the collected proceeds.
Overdraft is calculated using the following formulas.
The formula for calculating the standard overdraft limit is:
L = B * P, where
L is the estimated size of the overdraft limit;
B is the minimum of 2 values (Bp or Bn);
Вр is the average income from the sale of products per month, taking into account receivables for services, goods, works, taking into account accounts payable from advances received.
Вn - arithmetic mean between net credit receipts for the previous and last calendar months;
P - overdraft limit percentage, which is calculated as a base percentage (not more than 25%), which is increased by the limit percentage for this client, based on the bank's loyalty to him, as well as the client's financial indicators.
The formula for calculating the overdraft limit in advance:
L = S(a)/3, where
L is the estimated size of the overdraft limit.
S(a) - monthly credit turnover on the current account, minus the payments to be made to the client (payment of interest to the creditor bank, repayment of debt on loans).
Overdraft Features
– tied to a specific debit card account;
- it is possible to provide within the established limit, according to the contract. In this case, the limit depends on the size of the average income per month. The limit is set by each bank independently;
- is a short-term loan, calculated for a period not exceeding 12 months;
- often a period is set during which the overdraft can be repaid without interest;
– daily accrual of interest for the use of funds in excess of the established limit.
What are the conditions for an overdraft?
Each bank may have individual overdraft conditions. But we can note a number of universal requirements for the client:
The client must have at least 1 year of work experience in their main line of business.
Must be a client of the bank for settlement and cash services for at least the last 6 months with non-zero turnover in his set (except for advance overdraft).
Should be the minimum number of receipts to the bank account - at least three times a week (or 12 receipts per month), with the exception of an advance overdraft.
Do not have unpaid orders or claims on the current account.
In order to receive an overdraft, legal entities must submit a standard package of documentation for consideration by the bank, as well as certificates from banks with which the client works, as well as data on credit turnover over the past few months (at least 6-12 months), certificates from banks in which there are settlement accounts and data on the absence or presence of credit debts.
To obtain a legal overdraft, a legal entity must send an appropriate application, which should describe in detail the operation being carried out, after which the money is expected to be credited to the current account (indicating the date of receipt). You will also need to provide a copy of payment orders, an agreement, other documents that confirm the operation specified in the application.
For each legal entity, an individual calculation of the overdraft limit is provided - based on a special methodology. Each type has its own method of calculation. Overdraft calculation methods may have their own characteristics, depending on the bank, but the principle is universal. Every month, banks review the limits of advance, standard overdraft and overdraft for collection, taking into account the results of their client's activities.
To ensure compliance with the established limit, an overdraft can be calculated by each accountant. And at the same time, to increase the overdraft limit, each accountant needs to be able to control financial flows in order to avoid single large payments.
How is an overdraft paid off?
In the case of an overdraft, it is provided for the direction for repayment of the debt of all amounts that are credited to the current client account. Therefore, as funds are credited to the account, the loan will be repaid, thereby distinguishing the overdraft from other loans. It is also provided for the collection of interest at the rates existing in the bank or separately agreed with the client.
The overdraft loan is repaid by daily debiting of money from the client's current account without acceptance within the limits of the free balance of funds as of the end of the business day. In case of overdue overdraft debt, incoming client funds will be directed, first of all, to pay off the commission on the loan, and only then interest and principal debt will be paid.
What is the fee for using an overdraft?
By providing overdraft services, banks receive the following income:
- interest for the use of the loan - calculated on the basis of the debit balance of the account for the actual period of use of the overdraft;
- commission for using the overdraft service.
The overdraft fee is usually set at an amount slightly higher than the refinancing rate of the Bank of Russia - as a percentage of the current loan for each day the overdraft service is used.
Who can apply for an overdraft
This loan can be obtained by customers who have a permanent residence permit and place of work in the service area of a particular bank. An additional plus in this case is continuous work experience, the presence of successful relations with the bank, the absence of debt to this bank.
- Reframing, or How to deal with customer objections
When applying for an overdraft, it is important for the borrower to be sure that he will receive the expected monthly income, it is also important to control the timeliness of replenishing a plastic card from which funds will be debited to pay for the overdraft. Also, the holder of this card must know the fees for operations, account maintenance, cash withdrawals from it. Fees may vary depending on the bank.
How to get an overdraft
Overdraft can be issued by holders of plastic cards or those planning to receive them. To apply for an overdraft, you should visit the bank servicing the card, send the necessary package of documents and a signed application. Banks tend to put forward fewer requirements and conditions compared to conventional loans. Three to four days is enough to complete the application.
List of required documents for obtaining an overdraft
To obtain a loan, a legal entity should send the necessary documents for consideration by the bank; including:
- application for a loan;
- charter (change to the charter);
- copies of constituent and statutory documents, with changes and additions - to confirm their legal capacity; it is necessary to certify all copies by the body that registered this document, or notarized;
- protocol of the authorized body on the appointment of the head;
- registration certificate;
- permission to engage in this type of activity;
- an employment contract with the head of the enterprise on powers, terms, rights and obligations;
- photocopies of passports of the head and chief accountant of the enterprise authorized to sign financial documentation;
- financial statements as of the last date, with a mark from the tax authorities.
Banks that offer overdraft
Sberbank of Russia - the minimum rate is in the range of 25.9-33.9%.
VTB 24 - the minimum rate is 22-28%.
Uralsib - the minimum rate is from 16%.
Alfa-Bank - the minimum rate is 23.99-26.99%.
Sovereign Bank - the minimum rate is 22-31%.
Tinkoff Bank - the minimum rate is 24.9-49.9%.
Rosselkhozbank - the minimum rate is 15.39-18.15%.
Citibank – minimum rate 22.9%-32.9%.
Which bank to choose
We recommend submitting an application and documents for consideration by 3 banks at once - for a greater likelihood of an overdraft, while saving time on preparing documentation. To select a bank, you should be guided by the following criteria:
Ratings. Lending in large banks is more preferable. After all, they are more reliable and eliminate unnecessary worries for paperwork. The Expert rating agency provides data on which the following banks issue the most loans to small businesses (excluding Sberbank of Russia) - VTB 24, Uralsib, Rosselkhozbank.
The financial service of the company should be entrusted with studying the international ratings of selected banks. This information is available on the Internet. You should find out on the website of a particular bank how often there have been changes in ownership and top management in recent years. If this information is not on the site, this is another reason to think.
bank specialization. Most banks are focused on 2-3 sectors of the economy, providing loans to other sectors on a residual basis. If the bank works with your direction, then it understands the specifics of the company's activities. After all, the lack of mutual understanding slows down the process of cooperation, especially when raising funds for the implementation of intersectoral and innovative projects.
Comfort of cooperation. Applications in private banks are usually processed more quickly. They also offer increasingly competitive rates. Regardless of the chosen organization, private or public, they offer the same application procedure. However, the duration of the preparatory work and consideration of the application may depend on the account managers.
What to look for in a loan agreement
Effective interest rate. Before signing the contract, you should find out the final overdraft overpayment per year. It is important to take into account - in the case of a low interest rate, the bank usually compensates the funds through additional payments - for opening an account, considering an application, tariffs for settlement and cash services, etc.
Arbitration clause. This condition is unlikely to be beneficial for the borrower. After all, according to the contract, all disputes will be referred not to a court of general jurisdiction, but to an arbitration court (it is a non-governmental organization). If a bank imposes a certain arbitration court, then it is better not to count on the objectivity of the decision, and it will be difficult to challenge it. And the total amount of costs in this case exceeds the consideration of the case in a court of general jurisdiction.
bank sanctions. For example, a bank can prescribe a number of rights for itself:
- insist on early repayment of the loan;
– start early collection of collateral;
- bring the guarantor to subsidiary liability.
These overdraft conditions cannot be changed, because the bank offers a standard contract, which is agreed upon by all its services. However, every reliable client is important for the bank. Therefore, usually these rights are used only in case of force majeure.
Cons of an overdraft
1. High interest rate. It can reach 30% or more. For comparison, a regular loan is issued at 15-23%. But you need to take into account certain nuances:
- some banks set a grace period - when you do not pay any money for using an overdraft;
- some banks allow the payment of interest only for the actual use of money - during the day, week, and not for the whole month.
2. Limited. Usually, an overdraft is limited to the income received on the card. That is, the loan amount is set no higher than 30% of the income received.
5. Credit trap. When working with an overdraft, especially in an effort to get an interest-free loan, people eventually stop meeting the allotted time and are forced to pay more and more.
The main advantages of an overdraft:
1. Ease of opening and quick closing of loans; in case of insufficient funds on the account, the credit will be issued automatically. You can easily and quickly repay the loan.
2. Flexibility of lending - a payment scheme is established that reflects the borrower's daily money demand, its renewal. Overdraft repayment funds are debited from the current account immediately at the time of their receipt.
3. Borrower - in the absence of sufficient money in the account, the borrower automatically receives a loan, eliminating cash gaps.
4. Lack of additional paperwork, which is typical of other lending options.
Experts “for” overdraft
Alexander Brechalov, Vice-President of the All-Russian public organization of small and medium-sized businesses "Opora Rossii", Moscow
Usually, an overdraft can be granted without collateral or other security. After all, the receipt of money into the company's account becomes the actual security. According to banking experts, an overdraft is the most profitable lending option for businesses, given the most efficient use of the loan.
At the same time, interest is accrued on the actual debt - paying interest only for the funds that are really needed and used. The bank can also offer a grace period for working with an overdraft - without interest. Overdraft becomes especially profitable for companies that regularly face cash gaps.
Pitfalls of overdraft
– lack of experience in concentration of funds by a certain settlement date – leading to the withdrawal of the lending limit;
- the borrower does not know how to regulate finances by dates and amounts; because of this, the overdraft limit is reduced or lending stops altogether;
- the first overdraft agreement is signed with the condition that the entire amount of the money received will be transferred to this bank, and not just a part sufficient to repay the maneuver, which may limit the maneuverability of cash flows.
What to do if you fail to pay off your overdraft on time
Anton Khodarev, Financial Director of the Sapsan group of companies, Moscow
If the company for some reason cannot repay the loan or pay interest on time, try to appeal to personal responsibility and business logic when communicating with the bank. Enforcing debt collection can take a lot of time. In this case, the received collateral will still need to be realized. If the borrower offers a repayment option a little later or on slightly different terms, then there is a chance that the initiative will be accepted as the lesser of two evils.
- Current assets of an enterprise: concept, management and analysis
It is also quite successful to appeal to personal responsibility. Indeed, the assessment of the work of the head of the credit department is usually influenced not only by the conclusion of a loan agreement, but also by the return of the funds issued. His career will depend on the return of the money. A tactful allusion to this fact can either bring you a miracle in negotiations, or create a personal enemy, so the utmost accuracy is important.
Information about the author and company
Ekaterina Slabodkina, CFO, Saga Group, Moscow. Saga Group is a manufacturer of dairy and vegetable canning products. The company's enterprises are located in an ecologically clean region - in the Smolensk region (Gagarin). LLC "Gagarinskoe Moloko" (founded in 2000) is engaged in the production of condensed milk and glazed curds. In 2004, Saga Group entered the most dynamic food market in Russia - the canned vegetable market. In 2006, OOO Gagarin Cannery was established.
Alexander Brechalov, Vice-President of the All-Russian public organization of small and medium-sized businesses "Opora Rossii", Moscow. The Moscow city branch of the all-Russian public organization of small and medium-sized businesses "OPORA RUSSIA" was created by metropolitan entrepreneurs on September 12, 2002. The department was registered as a legal entity on July 27, 2005. The main goal of the MGO OPORY RUSSIA is to promote the process of bringing together Moscow entrepreneurs and citizens to participate in the formation of favorable political, economic, legal and other conditions for the development of entrepreneurial activity in the Moscow region and in the Russian Federation, providing both an improvement in the quality of life of citizens, and effective economic development.
Anton Khodarev, Financial Director of the Sapsan group of companies, Moscow. The group of companies "Sapsan" specializes in the production and trade of fish products. It includes factories located on Sakhalin and the Kuril Islands, as well as representative offices in Vladivostok, Khabarovsk, Rostov-on-Don and Nizhny Novgorod. The central office is located in Moscow.
The overdraft service for legal entities is actively gaining popularity among corporate clients, individual entrepreneurs, LLCs using the services of banking institutions.
It can be very useful, but first you need to evaluate all the pros and cons of such an offer, as well as evaluate the conditions offered by different banks.
And how is the overdraft written off from legal entities? When money is credited to the account of a legal entity, first of all they go to pay off the debt. The interest specified in the overdraft agreement for legal entities is also taken into account.
Using the service is convenient for legal entities, since it is possible to receive funds at any time when they are needed (read more about overdraft for individual entrepreneurs, small businesses and enterprises).
Comparison with credit and differences
Overdraft, in fact, is a loan, but it has legal entities.
These include the following:
- Overdraft is issued for a shorter period.
- With classic lending, the available amount is calculated depending on the goals and solvency of the client, with overdraft - on the turnover of funds in the account.
- With an overdraft, the amount is repaid fully automatically when replenishing a personal account, while a loan involves its partial repayment by depositing funds to a bank account.
- Overspending can be provided at the request of the client, and when lending, this is decided individually.
- The interest rate for classic lending to legal entities is fixed and is determined at the conclusion of the contract, while for an overdraft it depends on the terms and amount. Due to the large cash turnover, it may decrease.
In each case, the question of which is better is decided individually.
- Unsecured. This type of lending (overdraft) for legal entities is most often issued for a period of not more than a year, without collateral.
- secured. Loan terms in this case may be higher - up to two years, but the conditions may differ.
The possibility of overspending in this case reinforces the pledge in the form of property or guarantee obligations with the participation of third parties.
How is an overdraft provided to a legal entity? On collateral, banks can take real estate, goods in circulation, securities, bank guarantees, rights to receivables, and so on.
Offers from banks
Many large banks offer this service for legal entities (about banks that provide this service -). Consider the conditions for several of these proposals:
VTB 24
Sberbank
Quite often, such a loan product is issued at Sberbank. It offers two programs.
The first is Express-Orvedraft, on it the interest is 15.5%, and the maximum that you can borrow with a good history is 2.5 million rubles.
In the absence of a credit history, the limit is 1.25 million rubles.
Second - Business Overdraft, calculated at a rate of 12.73%. The total amount can be up to 17,000,000 rubles, the tranche is 30-90 days.
This program mainly assumes the presence of an excellent credit history and the active work of the organization.
Packages are designed for up to a year, while the commission for opening is 1.2% of the amount. Overdraft for legal entities in this case is provided without collateral. Read more about overdraft at Sberbank -.
Promsvyazbank
The amount can reach up to 60,000,000 rubles, but it cannot be more than half of the proceeds to the current account. Interest - from 13%, term - up to five years.
Tinkoff
In Tinkoff Bank, the percentage is from 24.9%, but the amount and terms are calculated individually in each case. You will learn about an overdraft from Tinkoff Bank.
Registration procedure
To be able to use bank funds, The borrower must meet a number of requirements:
The client submits the main set of documents when opening a current account. Most often, a service contract already includes the ability to connect a limit.
After 2-6 months, the bank will offer to do this, or you can apply yourself.
In the first case, you can simply refuse to overspending, if there is no need for it. In the second, the bank will analyze the financial position of the company, calculate the appropriate limit for legal entities and the percentage when determining the overdraft rate individually.
Directly when connecting the service, the following documents may be required:
- Application and questionnaire;
- Constituent documentation with the seals of state registration authorities;
- A copy of the license to conduct a certain type of activity, certified by a notary.
- Financial statements marked by tax authorities.
- Audit data.
- Information about the balance of finances, the absence or presence of debts.
What do you need to quickly get an overdraft for legal entities?
Every citizen knows what lending is and what benefits it provides for regular users of programs. But few people are interested in an alternative solution, namely the overdraft service.
In some cases, this can be a worthy replacement for conventional consumer loans and will allow you to get more benefits. Let's talk about making an overdraft for a legal entity.
The concept of an overdraft
The Bank offers to use this service to individuals and legal entities who have an open salary card. It is slightly different from conventional lending and, with proper observance of all conditions, you can benefit.
What is an overdraft service? Thanks to it, the client has the opportunity to make a purchase if there is not enough money on the plastic card.
For example, if a client scored 1,000 rubles in a goods store, but he has only 500 rubles in his account, then the bank will allow him to “go into the red” a little and the remaining 500 rubles will be provided on a loan basis.
The term "overdraft" itself is translated as an overspending of funds. You can connect services only by signing an agreement with the bank, having previously submitted an application. It differs from conventional lending in that "loan" funds have a short term of issue and the debt must also be repaid quickly.
In most banks, the overdraft conditions include a grace period of 30 days, during which no interest is charged. Interest is calculated as for a regular short-term loan. Bank employees individually approach the issue and set a different limit for each client.
Overdraft for legal entities may depend on income, their stability, the availability of expensive property and other things.
For entrepreneurs, this collaboration can help set up a business. After all, there are situations when there is not enough money in the current account to purchase a new product or supply equipment, but you need to make an urgent payment.
In this case, the bank will issue the missing amount, and then write off the debt along with interest for lending. This service can be obtained only if you submit an application to the bank in advance and sign an agreement.
In this way, an overdraft helps businesses maintain cash flow and pay bills on time. There are 3 types of overdraft available for legal entities:
- on standard terms;
- advance. This option is available only for verified and reliable customers;
- for collection. Provided in cases of collectible proceeds of at least 75%.
What will be the benefits of an overdraft for legal entities?
The algorithm for obtaining an overdraft for a legal entity is simple. For each case, a cash limit is charged.
Thanks to such short-term lending, the borrower has the opportunity not to wait until the goods or services pay off, but to make settlements with suppliers and employees on time.
For enterprises, the costs will be minimal, because the loan amounts are small and are constantly repaid by receipts to the current account by the end of the banking day. Thus, using an overdraft helps to avoid unpleasant situations and delays in production.
How to get a?
The legal entity has an available credit limit that it can use if necessary. To do this, you do not need to prepare documents for obtaining a loan and additionally load the accounting department.
To sign an agreement, you will need to collect a package of several documents once and submit it to the bank. This will save working time and reduce the burden on the financiers and accounting staff of the enterprise.
First of all, you will need to prepare:
- accounting reports on the activities of the enterprise;
- fill out the borrower's questionnaire and submit an application on behalf of the company;
- cash flow reports;
- documents that will show the status of accounts payable and receivable.
The Bank has the right to request from the representatives of the company any other information that can confirm solvency.
He also needs guarantees that the company will not go bankrupt in the near future and may be asked to provide production and sales statistics or other similar documents. If the type of activity of the company requires a license, the bank may ask for copies of valid licenses.
Limits for each client are calculated separately, because many factors can affect this, ranging from income to financial forecasts for the growth of the company's income.
For example, several well-known banks can offer such limits for legal entities:
- Alfa-Bank can sign an agreement subject to all conditions and issue a limit ranging from 750,000 to 6 million rubles. Legal clients who are at the cash desk - from 500 thousand to 10 million rubles;
- UralSib issues a card with an overdraft of up to 500 thousand rubles;
- Mezhtrustbank calculates limits for each client separately;
- Absolut Bank allows its clients to use an overdraft facility in the amount of up to 750 thousand rubles.
Such banks give overdraft to legal entities quite willingly, especially if the solvency of customers is high.
Conditions of banks for overdraft lending
There is a huge competition between banks, each of them is trying to create the most favorable tariff package.
For example, in Absolut Bank, the limits are high, so you will also have to attach a certificate from the employer to all documents. Usually, the presence of a source of stable income and registration in the region where the plastic card is issued is required.
Depending on the financial situation of the client, the interest rate can be charged in the range from 18% to 30% per annum for using the overdraft.
You will also need to make a minimum payment of 10% of the principal amount monthly. Usually, issuing a card is free, but you will have to pay about 48 thousand rubles a year for the service.
More about the loan
- Term up to 5 years;
- Loan up to 1,000,000 rubles;
- Interest rate from 11.99%.
Loan from Tinkoff Bank | Apply for a loan |
More about the loan
- According to the passport, without references;
- Loan up to 15,000,000 rubles;
- Interest rate from 9.99%.
Loan from Eastern Bank | Apply for a loan |
More about the loan
- Term up to 20 years;
- Loan up to 15,000,000 rubles;
- Interest rate from 12%.
Loan from Raiffeisenbank | Apply for a loan |
More about the loan
- Term up to 10 years;
- Loan up to 15,000,000 rubles;
- Interest rate from 13%.
Loan from UBRD Bank | Apply for a loan |
More about the loan
- Solution instantly;
- Loan up to 200,000 rubles only with a passport;
- Interest rate from 11%.
Loan from Home Credit Bank. | Apply for a loan |
More about the loan
- Up to 4 years;
- Loan up to 850,000 rubles;
- Interest rate from 11.9%.
Loan from Sovcombank. |
Among the numerous types of financing, lending services to legal entities under an overdraft stand apart. Banks are willing to set limits for clients with an impeccable credit history, especially if most of the income comes through settlement accounts opened in any regional division. Overdraft loan for legal entities, what is it, we will consider in this article.
Definition and features of loans in the form of overdrafts
Overdraft for a legal entity- these are borrowed funds that are provided by the bank to cover the current expenses of the enterprise in excess of the balance of funds existing in current accounts. If the client has a time gap between the need to pay his obligations to counterparties and the expected income, he can count on a loan established on the current account.
Lending under the overdraft program is carried out exclusively on the basis of a formalized loan or loan agreement signed by two parties: a legal entity and a bank.
Overdraft types
Given the competitive environment in the banking sector, overdrafts for legal entities may be different. According to the information used to determine the amount:
- standard. It is allocated to existing clients with a good credit history, provided there is no debt to budget or other official funds. The loan amount is determined by the average monthly receipts to bank accounts;
- advance. Provided to potential customers as part of their involvement in the service. To calculate the limit, information on receipts to accounts from other financial institutions is used.
For security:
- blank. The guarantee of the fulfillment of obligations is the transfer of turnover or collection to bank accounts in the amount of about 70% of the gross values. In fact, the loan agreement is concluded without collateral. In practice, the guarantee of officials or co-owners of the enterprise is often required;
- with collateral. In the form of collateral, the same instruments can be used as with conventional lending: movable and immovable property. If the obligations are secured by funds in deposit accounts, the overdraft is called technical.
According to the terms of repayment:
- trench. Fixed terms are set for the repayment of each specific case of using funds in excess of the balance. Within 30-90 days;
- urgent. The contract specifies the terms for repayment of the debt. On average, the "zeroing" of the debt should occur once every 30-90 days.
Depending on the credit and marketing policy of the bank, there are other types of overdrafts. For example, Sberbank offers individual, express and with a general limit.
For legal entities, the choice of a product is directly related to its cost. Risky, blank loans are provided at higher interest rates than secured ones.
"Sberbank of Russia" - Credit "Business Overdraft": conditions
Conditions for obtaining
To know how to get an overdraft for a legal entity, you need to familiarize yourself with the general criteria that banks apply when assessing the possibility of lending:
- Flawless story. The presence of outstanding loans is an obstacle to initiating the review procedure.
- no debt, especially overdue, before budget and social funds.
- Profitable activity and availability of income to current accounts. The retrospective is set by each bank independently, depending on the adopted credit policy. On average, 3–6 months of net turnover and at least one annual balance are considered. For technical overdrafts, this requirement is removed. For other types of lending, the financial condition of a legal entity is studied more closely.
Banks have an individual approach to lending to legal entities. Therefore, consideration of the overdraft limit can take from several days to several weeks.
Overdraft calculation
Each bank applies its own coefficients and formulas for linking the credit limit to the clients' current accounts. For example, Sberbank sets an overdraft for legal entities based on an analysis of the turnover of funds over the past 3 months. In others, they can take into account from 2 to 6 months.
In this case, the limit is usually equal to the average value for the entire calculation period, adjusted for the coefficient applied by the bank. Depending on the type of overdraft, as well as the financial condition of the legal entity, from 10 to 75% net monthly income.
How overdraft works for legal entities
Most often, the contract is concluded for no more than 1 year. Within the validity period, the overdraft is recalculated on a monthly basis. If income falls, then the amount decreases. If they grow, the limit for a legal entity is revised upwards. Each change in lending conditions is accompanied by the signing of additional agreements to the main loan agreement.
The procedure for obtaining credit funds is simplified to a minimum. To do this, a payment order from the client's account, which has no balance, is sufficient. Its payment is carried out in an overdraft. That is beyond the rest. The target nature of the loan is current activity. It is not allowed to pay for fixed assets and make investments with funds.
Repayment occurs when the next receipt from any counterparty is credited automatically. At the same time, interest is charged for the actual time of using the overdraft.
Benefits and Unavoidable Costs
Opening a limit will require the provision of financial and legal documents to the bank. Therefore, the question arises of the justification for obtaining such a loan. Considering that overdrafts are offered directly by financial institutions, many heads of legal entities refuse, because labor costs and subsequent loan servicing are not worth the time spent: the amounts are not critical, but there are many pitfalls. However, there are many advantages:
- simplified procedure for obtaining;
- a constant margin of safety to cover cash gaps;
- the presence of an airbag in case of unforeseen costs and force majeure circumstances;
- acceleration of financial and trade turnover.
Overdraft loan for legal entities, what it is and how it works, we have already analyzed. But it is impossible not to touch upon an important component of any financial instrument - expenses. In addition to the interest rate, which is charged for each actual day of using credit funds in addition to the current account balance, there are commissions:
- for review and analysis of documents;
- for setting a limit;
- for early repayment;
- for the unused limit.
The longer the cooperation with the bank and the more stable the financial condition, the more preferences a legal entity may require when servicing. An overdraft often acts as a tool to demonstrate the loyalty of a financial institution to its customers, so during preliminary negotiations it is possible to separately discuss the possibility of canceling additional commissions.
And separately pay attention to the size of penalties for failure to meet the maturity dates or the intended purpose: they can be 2-3 times more than the established interest rate.
Cooperation of legal entities with banks should lie exclusively in the legal field. If at the negotiations you are promised one thing, but in the contract the information is fundamentally different, you should not rely on oral assurances of bank officials. All overdraft conditions must be recorded on paper.