Overdraft for legal entities comparison. What to look for in a loan agreement. The limit in this case is calculated as follows

Overdraft lending is a profitable financial instrument for both the borrower and the banking organization. It allows you to receive the missing funds at the right time, while providing a constant, albeit not too significant, income to the lender.

What is overdraft lending

Loans of this type are essentially a completely ordinary loan, which is provided to an enterprise on the basis of some agreements and on predetermined conditions. This product differs from standard forms of loans in that it simply leaves the client the opportunity to take money. That is, according to standard scheme funds are transferred to the account of the borrower or a third party in agreement with the company. They are transferred immediately and in full. From this moment on, the company is obliged to return all the money with interest within the agreed period. But an analysis of overdraft lending suggests that it is given only when it is needed. In fact, this is more profitable for the company, because you only need to pay interest on the amount taken, and not on the amount that can be received. There are a lot of options and varieties of such loans.

Varieties

Overdraft loans are divided into four main types:

technical,
for collection,
advance,
standard.

The first type is a loan that is offered to the client without taking into account his financial statements and almost all other indicators. The main thing here is turnover and revenue. If a banking organization sees that large amounts of funds are being deposited into the accounts of a given person with enviable regularity, it can offer exactly technical version overdraft It is risky, but beneficial for both parties.

The second type, which can accept overdraft lending, is suitable for large retail chains or other companies that regularly deposit proceeds to the bank. This is a more reliable option, in which the company can use the money even before it actually falls into the account, and after the proceeds are deposited, the entire debt is repaid. It should be noted that the agreements here can be very diverse.

The third type of loans is advance. It is the least profitable for the bank, but it is convenient for the company. This option of providing loans is most often practiced in order to attract a legal entity for servicing.

The last, fourth, is the standard type. It best fits the classic description of overdraft lending for legal entities. Its essence is simple. The client agrees with the bank that he will be able to use certain amounts at his own request. The financial institution, in turn, stipulates how long he can use the money and under what conditions.

For individuals

Overdraft lending to individuals is most often carried out through the issuance of a plastic credit card, in which a fixed amount is reserved for the client, which he can use at his own discretion. This type of loan is familiar to many people; it is understandable and accessible. The main problem here is that the bank does not actually receive any collateral, and in case of problems or non-payment, it becomes extremely difficult to return the money. The point here is that the amounts offered to individuals are not too large, and no one will sue because of them, since there will be more problems than benefits.

For companies

Overdraft is a more serious financial instrument. Here the amounts are much larger, and such loans are repaid much more often. Many enterprises prefer this over all others, as it is profitable, simple and convenient. True, in most cases the amounts are not too large, but as additional funds that can be put into circulation, this is quite enough.

Peculiarities

There are several main features that any overdraft loan has. The first is that there is no purpose for the loan. That is, most often any loan is intended for specific, pre-agreed purposes. But funds received through an overdraft, as a rule, can be directed in any convenient direction. The second feature is the loan term. Most often it is less than one month. In some cases - two or more, but this is rare. This does not mean the period during which the client, in principle, has the opportunity to take money, but after what time he must return it in full. The interest rate on such loans is usually higher than on a regular loan, but the number of required documents is much less. And one more important point: most often no collateral is required.

Overdraft agreement

This document is not much different from a regular standard lending agreement. The main differences are the conditions that are typical only for such a system as overdraft lending, as well as a strict link to the current account (for legal entities). Many banks stipulate the possibility of forcibly writing off money from the account of a potential borrower in the event that he himself does not repay his debt on time for one reason or another. The contract is drawn up on a standard form, includes details of both parties, clearly stipulates the financial part of the issue (how much, where, to whom, when, etc.), and will also most likely contain clauses on force majeure and conditions of non-refund of funds. Sometimes there is also other information that may be required in accordance with current legislation, bank regulations, client wishes, and so on.

Example for a legal entity

The company constantly receives certain approximately equal and stable amounts of funds into its account. Based on their analysis, the bank offers the company to open an overdraft. After agreeing on and concluding an agreement, the company gets the opportunity to use not only the money that it has in its account, but also the money that the bank gave it. Suppose that a company has the opportunity to conclude a very profitable deal, but it does not have enough of its own funds to implement it (it urgently needs to expand, purchase materials, and so on). And at this moment she can take the reserved money and fulfill all the conditions, after which she will receive additional profit. At the moment when the loan needs to be repaid, the company receives increased income into its account, which the bank, by agreement, immediately sends to pay off the debt. This was the simplest and most obvious example of overdraft lending.

Example for an individual

In the case of ordinary people, everything looks even simpler. A person receives a card from the bank, which he can either use or not use. There is a fixed amount. A client comes to the store and sees a product that he has long wanted to buy, but there was no money or other options. And now what you want is sold at a good discount. If the borrower did not have an overdraft card, he would be forced to save money further and ultimately purchase the product after the end of the promotion in the store, at a much higher price. And with this card, he pays for the purchase immediately and, most likely, saves a lot, especially if he can pay off his debt in a short period of time.

Overdue

This is a global problem for all overdrafts. True, most often it concerns individuals who cannot or do not want to return previously received funds. If the amount for the bank is insignificant, then the person may simply be lucky, and if they do not forget about him, then at least they will postpone the solution to the problem for a long time (during which very considerable interest will “drip”). But, of course, sooner or later it will still have to be returned. As soon as the bank realizes that the amount is already large enough to contact the court and debt collectors, it will begin proceedings and will definitely achieve its goal.

Advantages

Overdraft lending has a number of advantages. This includes such features as a small package of documents, no need to provide collateral, no fee for money that was not used by the client, and instant provision. That is, a person or legal entity may be interested in one or another element (or all of them at once) and that is why they will take a loan. For the bank, all this is not particularly convenient or profitable, but such a system makes it possible to retain customers, attract new ones and even make a small profit. Most often, financial institutions earn more not from the loans themselves, but from various services related to them. For example, a borrower may like working with a given bank and decide to place a deposit there, take out a larger loan, or receive a salary, pension, or other funding options through it. As a result, the overall profitability of one loan increases significantly, and many banks take this feature into account, which allows them to offer potential borrowers an overdraft at interest rates that are lower than market rates. Naturally, this is already convenient for clients who have the opportunity not only to receive “cheap” money, but also to be serviced by a suitable bank.

Flaws

Of course, an overdraft card or similar loan has some disadvantages. The main one is the extremely short period during which you can use the money. Unlike the standard form of lending, which provides for a year or even several years, an overdraft most often needs to be repaid within a month or several months, which is not very convenient. Don't forget about the intrusiveness of the service. Some banks open such loans even without the knowledge of the client, which irritates many people and ultimately can lead to significant losses. Among other things, some scammers use fake documents to obtain loans of this type due to the fact that no special papers are required from the client. As a result, they are not going to return anything, the real owner of the documents has nothing to do with it, because it is not his signature that is on the agreement, and the financial institution begins to suffer losses. There are fewer problems with legal entities, because you can always write off the amount of debt from the company’s current account. However, if there is no money on the balance sheet and is not expected, then again a problem arises with the return of unsecured funds. It should be noted that many banks have special services that monitor changes in the amounts received into borrowers' accounts and raise the alarm if the situation begins to deteriorate. In this case, the financial institution can simply close the overdraft, completely depriving the company of access to borrowed funds.

Results

Despite the presence of shortcomings, in general this system is very profitable and convenient, especially for clients. It allows you to receive as much money as required in a timely manner, which, in turn, makes it possible for individuals to purchase goods that are necessary, and for legal entities to invest additional funds in their activities, receiving much more than they will have to return later, even taking into account accrued interest . The main thing in all this is timely repayment. Even a small delay can globally ruin your credit history, which will prevent you from getting loans from other banks, and penalties, commissions, interest and other payments, which in the end will still have to be repaid, can greatly exceed all reasonable limits and even the original loan amount.

Among the numerous types of financing, overdraft lending services for legal entities stand out. Banks are willing to set limits for clients with an impeccable credit history, especially if most of the income goes through current accounts opened in any regional division. An overdraft loan for legal entities, what it is, 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 expected receipts, 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 credit or loan agreement signed by two parties: a legal entity and a bank.

Types of overdrafts

Given the competitive environment in the banking sector, overdrafts for legal entities may vary. Based on the information used to determine the amount:

standard. Allocated to existing clients with a good credit history, provided there is no debt to budgetary or other official funds. The loan amount is determined by the average monthly receipts to bank accounts;
advance. Provided to potential clients as part of their recruitment for services. To calculate the limit, information on receipts to accounts from other financial institutions is used.

By provision:

blank. The guarantee of 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, a guarantee is often required officials or co-owners of the enterprise;
with security. The same instruments as in conventional lending can act as collateral: movable and real estate. If obligations are secured by funds in deposit accounts, an overdraft is called a technical overdraft.

According to repayment terms:

trench Fixed terms are established for the repayment of each specific case of using funds in excess of the balance. Within 30–90 days;
urgent. The agreement specifies the terms for repaying the debt. On average, debt “clearing” should occur once every 30–90 days.

Depending on the bank's credit and marketing policies, there are other types of overdrafts. For example, Sberbank offers individual, express and with a general limit.

For legal entities, the choice of product is directly related to its cost. Risky, unsecured loans are provided at higher interest rates compared to secured ones.

"Sberbank of Russia" - Business overdraft loan: conditions

Conditions for receiving

To know how to obtain an overdraft for a legal entity, you need to familiarize yourself with the general criteria that banks apply when assessing the possibility of lending:

An impeccable story. The presence of outstanding loans serves as an obstacle to initiating the review procedure.
No debt, especially overdue, to budget and social funds.
Profitable activities and availability of income to current accounts. Each bank sets the retrospective independently, depending on the adopted credit policy. On average, 3-6 months of net turnover and at least one annual balance sheet 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, reviewing your overdraft limit can take anywhere from a few days to a few weeks.

Overdraft calculation

Each bank applies its own coefficients and formulas to link the credit limit to clients' current accounts. For example, Sberbank sets an overdraft for legal entities based on an analysis of the turnover of funds over the last 3 months. In others, calculations may take from 2 to 6 months.

In this case, the limit is usually equal to the average value for the entire calculation period, adjusted to the coefficient used by the bank. Depending on the type of overdraft, as well as the financial condition of the legal entity, it may be set from 10 to 75% net average monthly receipts.

How does overdraft work for legal entities?

Most often, the contract is concluded for no more than 1 year. During the validity period, the overdraft is recalculated on a monthly basis. If revenues fall, the amount is reduced. If they grow, the limit for a legal entity is revised upward. Each change in the terms of the loan is accompanied by the signing of additional agreements to the main loan agreement.

The procedure for obtaining credit funds has been simplified to a minimum. To do this, a payment order from the client’s account with no balance is sufficient. Payment is made via overdraft. That is, in excess of the remainder. The purpose of the loan is current activity. It is not permitted to pay for fixed assets or make investments with funds.

Repayment occurs automatically when the next receipt from any counterparty is credited. In this case, interest is charged for the actual time of using the overdraft.

Benefits and inevitable costs

Opening a limit will require the provision of financial and legal documents to the bank. Therefore, the question arises of the justification of obtaining such a loan. Considering that overdrafts are offered directly by financial institutions, many heads of legal entities refuse, because the labor costs and subsequent loan servicing are not worth the time spent: the amounts are not critical, and there are many pitfalls. At the same time, there are many advantages:

simplified receipt procedure;
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.

Credit overdraft for legal entities, what it is and how it works, we have already discussed. But we can’t help but touch on an important component of any financial instrument – expenses. In addition to the interest rate, which is charged for each actual day of use of credit funds in addition to the balance on the current account, there are commissions:

for reviewing and analyzing 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. Overdraft often acts as a tool to demonstrate the loyalty of a financial institution to its clients, therefore, during preliminary negotiations, the possibility of canceling additional commissions can be separately discussed.

And pay special attention to the size of penalties for failure to meet repayment deadlines or designated purposes: they can be 2-3 times higher than the established interest rate.

Cooperation between legal entities and banks should lie exclusively within the legal framework. If during negotiations you are promised one thing, but the information in the contract is completely different, you should not rely on verbal assurances from officials at the bank. All overdraft conditions must be recorded on paper.

Overdraft is becoming increasingly popular among all categories of banking clients. The specifics of the financial and economic activities of an enterprise make overdraft a particularly attractive banking service for legal entities.

Overdraft - what is it in simple words

The overdraft loan got its name from English word overdraft, translated as above plan, overspending. The purpose of a loan in the form of an overdraft is to ensure that the client carries out debit transactions on the current account in the event of a lack of own funds. The bank lends to the borrower, helping him overcome the so-called cash gap - the excess of account expenses over receipts. The size of such a daily loan is equal to the amount of 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 size of the limit depends on the cleared receipts into the legal entity's account during a certain period. Cleared proceeds reflect, first of all, revenue from core business and do not include received loans and borrowings, proceeds from sales valuable papers, replenishment of the enterprise account at the expense of the cash desk and accounts opened in other banks and other cash flows not due to the main one economic activity borrower. 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 period includes two parameters:

The period during which the bank provides an overdraft loan to a legal entity, in accordance with the concluded agreement, for example, 12 months.
The maximum interval during which the resulting debt must be fully repaid (both its balance and interest), for example, 30 calendar days.

The interest rate on an overdraft is set individually and depends on the account turnover, the availability and type of collateral, etc. The rate may be changed by the bank as the client uses the product.

Advantages of overdraft over other types of loans for legal entities

The main advantage of a loan in the form of an overdraft is ease of use. The company uses exactly the amount of borrowed funds that it lacks to pay for expenses at the end of the operating day. The client's account has a certain reserve (overdraft limit) to go into negative territory. Not a single line of credit, even the most flexible one, can provide such a mode of account functioning.

The second advantage of an overdraft is that it usually comes without collateral. The bank is insured by client turnover on the account. In some cases, the bank may require a guarantee from individuals who own the organization.

How does overdraft work?

Overdraft is activated as soon as there are not enough funds in the client's account to process payment orders. Maximum credit support is limited by the overdraft limit. The next day, the resulting loan debt is repaid with current receipts. Interest is usually charged at the end of the month or other agreed period.

Legal entity clients of Nevsky Bank have the opportunity to open an overdraft with the most optimal conditions suitable for the client to conduct his business. The limit and validity period 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.

Overdraft for legal entities is established on the current account. Most often, it is approved before the account is opened, but this does not happen in all cases. Let's consider the types and main conditions for the provision of the service, as well as its advantages compared to classic lending.

Basic Concepts

Overdraft in general understanding is a credit limit on an account. For example, a company has an account that it uses for business activities. When it was opened, the bank approved an overdraft of 10 thousand rubles. Then, when making settlements with counterparties, the company can rely not only on its own money, but also in excess of the limit by 10 thousand rubles. In this case, the account will have a negative balance. When funds are received, all the money goes to repay the loan, and what remains above it goes to the current account. That is, the company will immediately repay the entire debt, if, of course, the money received is enough for this. You can use the overdraft many times.

Money must be deposited into this current account; banks do not approve an overdraft if there is no movement of funds. This account can be linked, for example, to a terminal in a store.

Types of overdraft

Loans always have a wide range of options, banks are developing new tariff plans. Let's look at the main types of overdraft offers:

Standard - for paying payments and orders. It is usually calculated as the company's minimum turnover for the month divided by 2. The month is selected based on the truncated turnover for the last quarter. Larger deposits and loan payments are deducted.
Advance - provided to new clients who are just opening an account. It is usually calculated as the minimum turnover in a third-party bank for the last 3 months, divided by 3. Plus, the bank sets maximum values for the possible limit.
For collection. If collected proceeds are regularly deposited into the client’s current account, the bank provides overdraft lending on more favorable terms. Calculation formula: the collected amount is divided by 1.5 or 2, depending on the bank. There is also the possibility of receiving a new tranche before the previous one is fully repaid.
Technical – one that occurs unintentionally after certain transactions, for example, the purchase and sale of foreign currency. As a result, a small overdraft may occur, which must be covered usually within 3 days after receiving the relevant notification from the bank. Otherwise, he may apply penalties.

There is also an unplanned overdraft when a technical error occurred. There is nothing terrible, but you need to contact the bank to write a claim. The credit institution must remove interest on accidental write-offs.

Conditions of receipt for legal entities

Overdraft is one of the ways to attract customers. Every legal entity has payments that need to be paid now, but there is no money. This is where the bank comes to the rescue. But the entrepreneur must be a client of the lender. The main condition for an overdraft is to be serviced by the bank you apply to for a loan.

Minor conditions vary depending on the tariff plan and bank. The borrower must work in his field for at least 1 year. To calculate the overdraft amount, you usually need to use the bank’s services for at least six months. Receipts must be regular. And at least 12 times a month, that is, 3 times a week. There should also be no debt on payment orders.

What documents need to be presented to apply for a loan in the form of an overdraft:

usually it is enough to provide certificates of existing loans and that there are no late payments or debts;
if the conditions provide for the presence of a guarantee, then the same documents are required for the guarantor as for the borrower.

Overdrafts with a high credit limit usually require additional collateral. Typically, this is a personal guarantee from the business owner for the company.

There is no such requirement for an individual entrepreneur, since he is already liable with his personal property for all obligations related to commercial activities.

With the collected package of documents, you need to contact the bank, write an application and wait for the application to be reviewed. Then, if approved, go to the office again and sign the agreement.

The convenience of this loan is that approval for small businesses is almost 100%. Often a small limit is provided immediately upon opening an account. At high turnover, the bank can automatically increase the overdraft amount, and the client does not need to contact you for this.

Business requirements

In addition to the fact that the business must exist for at least a year, there are additional requirements:

The organization must be registered in the Russian Federation. Foreign businesses usually cannot get this type of loan.
Sometimes there are restrictions on annual revenue.
For individual entrepreneurs Another rule is introduced: age, which should not exceed 70 years.

This standard requirements, they may vary depending on the bank’s conditions and the type of overdraft.

Procedure for receipt and use

An overdraft for legal entities is different in that it cannot be spent for any purpose. You can pay for any purchases for the company (repairs, equipment, machinery, etc.), payments for obligations, orders, utilities for the company, sales of goods, the list is quite large.

For some more loyal banks, this list increases, but, as a rule, money within the limit cannot be withdrawn in cash or spent on the personal purposes of the business owner. Also, many banks prohibit the use of overdrafts to repay loan obligations.

Repayment can be made as follows:

the entire debt is written off when the client’s money arrives;
a certain amount is charged, that is, part of the loan is repaid.

Usually an overdraft is approved for a period of up to 1 year, which is why it is called a short-term type of lending. But, as a rule, if the company works diligently, it is extended.

Which banks offer an overdraft?

Many people trust Sberbank, so let's start with it. Credit is provided for up to 1 year. Interest rate from 12%. Determined individually for each client. Amount from 100 thousand rubles for agricultural companies and from 300 thousand rubles for others, maximum 17 million rubles. Security: guarantee from the heads of the organization and legal entities associated with the enterprise.

Overdraft for business at Sberbank

Limit amount

from 100 thousand rubles
up to 17 million

overdraft terms

from 12%
per annum

* - a guarantee is required from the heads of the organization and legal entities associated with the enterprise

VTB approves a larger amount - from 850 thousand rubles. The percentage is slightly different: from 12.9%. But what’s good is that the period increases from 1 year to 2 years. There are no deposits or commissions.

Offers amounts from 300 thousand rubles at an individual percentage. The amount for an advance overdraft is not higher than 30% of confirmed turnover, for bank clients - no more than 50%. Minimum rate: 12%. Loan term up to 1 year. Guarantee only for business owners. from 300 thousand rubles at 13.5% -16.5%. For existing bank clients, the maximum amount is 10 million rubles, with an advance payment - up to 6 million. Lending for a period of 1 year or less. A 1% commission is charged for opening a limit.

Advantages of an overdraft compared to a loan

Each bank product has both positive and negative sides. An overdraft often helps entrepreneurs out; this is how it differs from a loan:

it can be used several times, or not used at all if the company has enough of its own funds;
loan repayment occurs automatically when funds are received, the borrower does not need to contact the bank;
interest is accrued on the withdrawn amount, that is, the company does not pay anything for the remaining funds of the limit;
usually does not require collateral;
simplified approval and registration procedure.

Compared to a loan, there are a number of disadvantages:

smaller amounts;
short loan period - repayment of the tranche usually needs to be made within 1-2 months;
not suitable for investment purposes;
cannot be taken to open a business or by new enterprises - usually six months of activity with confirmed turnover is required;
Constantly available credit funds psychologically incline the borrower to use them - as a result, there is a risk of “getting into debt” more often than is really necessary and will not be able to cope with the credit load.

Every citizen knows what lending is and what benefits it provides for regular users of the programs. But few people are interested in an alternative solution, namely the overdraft service.

In some cases, this can be a worthy replacement for regular consumer loans and will allow you to get more benefits. Let's talk about arranging an overdraft for a legal entity.

Overdraft concept

The bank offers the use of this service to individuals and legal entities who have an open salary card. It is slightly different from conventional lending and, if all conditions are properly met, you can get benefits.

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 has collected goods worth 1,000 rubles in a store, but only has 500 in his account, then the bank will allow him to “go into the minus” a little and the remaining 500 rubles will be provided on credit terms.

The term “overdraft” itself is translated as overspending of funds. You can connect services only by signing an agreement with the bank and submitting an application in advance. It differs from conventional lending in that “credit” funds have a short issuance period and the debt must also be repaid quickly.

In most banks, the conditions for providing an overdraft include a grace period of 30 days, during which no interest rate is charged. Interest is charged as for a regular short-term loan. Bank employees approach the issue individually and assign a different limit for each client.

An overdraft for legal entities may depend on income, its stability, the presence of expensive property, and other things.

For entrepreneurs, this cooperation can help establish 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 a payment urgently.

In this case, the bank will issue the missing amount and then write off the debt along with interest on the loan. This service can only be obtained if you submit an application to the bank in advance and sign an agreement.

Thus, 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 to verified and reliable clients;
for collection. Provided in cases of collected revenue of at least 75%.

What are the benefits of an overdraft for legal entities?

The algorithm for how to obtain an overdraft for a legal entity is simple. For each case, a cash limit is calculated.

Thanks to such short-term lending, the borrower has the opportunity not to wait for goods or services to pay off, but to make payments to suppliers and employees on time.

For enterprises, the costs will be minimal, because the loan amounts are small and are constantly repaid from the proceeds to the current account by the end of the banking day. Thus, using an overdraft helps to avoid unpleasant situations and production delays.

How to get a?

A legal entity has an available credit limit that it can use if necessary. To do this, you will not need to prepare documents for obtaining a loan and additionally burden your 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 allow you to save work time and reduce the burden for financiers and accounting employees of the enterprise.

First of all, you will need to prepare:

accounting reports on the activities of the enterprise;
fill out the borrower form 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 company representatives 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 to provide copies of current licenses.

Limits for each client are calculated separately, because this can be influenced by many factors, ranging from income to financial forecasts for the growth of the company’s income.

For example, several well-known banks can offer the following limits for legal entities:

Alfa-Bank can sign an agreement if all conditions are met and will issue a limit ranging from 750 thousand to 6 million rubles. Legal clients who are in cash service – 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 of up to 750 thousand rubles.

Such banks give overdrafts to legal entities quite willingly, especially if the clients’ solvency is high.

Bank conditions for overdraft lending

There is huge competition between banks, each of them is trying to create the most profitable tariff package.

For example, at Absolut Bank the limits are high, so all documents will also have to be accompanied by a certificate from the employer. Usually, having a source of stable income and registration in the region where the plastic card is issued is required.

Depending on the client’s financial situation, the interest rate can be charged in the range from 18% to 30% per annum for using an overdraft.

You will also be required to make a minimum payment of 10% of the principal amount each month. Usually, issuing a card is free, but you will have to pay about 48 thousand rubles a year for maintenance.

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