What is a safe udhaar limit for a regular customer?

One to two weeks of that customer's normal purchase, and never more than you could absorb losing entirely. For someone spending ₹500 a week that is ₹500–₹1,000. The figure will feel low the first time you say it; that is the point.

Should I tell the customer their limit?

Yes, and early. A limit mentioned casually the first time you extend credit is information; the same limit produced during a refusal sounds like a judgement of them. Say it once, at the start, and you never have to argue it later.

How do I decide a limit for a brand-new customer?

Zero, or a token amount you would not mind losing. A limit is extended against payment history, and a new customer has none. Say it the same way to everyone — "naye customers ke liye cash, phir aage se udhaar" — so nobody feels singled out.

When should I raise someone's limit?

After three or four full cycles of borrowing and clearing on time. Raise it in steps rather than doubling it, and raise it because the history earned it — not because they asked at a moment when you did not want to refuse.

What if my competitor gives unlimited udhaar?

Some of them are quietly going out of business doing it. A shop with disciplined limits and healthy cash outlasts one financing its customers indefinitely. Compete on stock, price, and service — financing is the one thing you cannot win by doing more of.

Udhaar & Recovery

Udhaar Limits: How Much Credit Should You Give a Customer?

12 August 2026 · LenDen Team · 6 min read

The working rule is one to two weeks of that customer's normal purchase, capped at an amount you could absorb losing entirely. For a customer who buys ₹500 a week, that means ₹500–₹1,000 — not the ₹8,000 that accumulates when nobody ever set a number.

The figure matters less than the fact that you set it before they ask. Every limit decided across the counter, in the moment, with a customer waiting, ends up larger than the one you would have chosen calmly.

The short version

Limit = 1–2 weeks of their normal purchase, whichever is lower than your pain threshold.
Decide it in advance. Deciding under pressure always produces a bigger number.
Say the limit out loud early, so a later refusal is a reminder, not a judgement.
New customers get zero or a token amount. There is no history to lend against.
Raise limits in steps, on evidence, never on request.

Two questions set the number

First: what do they normally spend with you? Not their biggest purchase — their typical week. If they buy ₹400–₹600 most weeks, the number you are working with is ₹500.

Second: what could you lose without it hurting? Be honest. For most small shops this sits somewhere between ₹1,000 and ₹3,000 per party. If one customer disappearing would make the month difficult, you have found your real ceiling.

The limit is the lower of those two answers. That is the whole calculation.

Weekly purchase	1–2 week limit	Use this unless…
₹200	₹200–₹400	—
₹500	₹500–₹1,000	—
₹1,500	₹1,500–₹3,000	₹3,000 is more than you can absorb
₹5,000	₹5,000–₹10,000	Almost certainly above your pain threshold — cap lower, or move to written terms

That last row is the important one. Once a party's natural limit exceeds what you can comfortably lose, informal udhaar is the wrong instrument. That is a trade arrangement, and it should have written terms, agreed dates, and ideally something signed. It is covered in how to write an udhaar receipt that holds up.

Why the limit has to come first

Here is the sequence that produces most bad debt, and it does not involve a single dishonest customer.

A regular asks for ₹300 on credit. Obviously fine. Next week ₹400 more before clearing the ₹300. Still fine — they always pay. Two weeks later it is ₹1,100. Now refusing feels like an accusation, so you extend again. At ₹2,500 you are genuinely worried, and the customer has started to notice you are worried, which makes them uncomfortable coming in. At ₹4,000 they stop coming altogether.

Nobody decided anything. There was no point at which someone chose ₹4,000. It accumulated because there was no number to hit.

A limit is not a judgement about a person. It is the thing that lets you keep saying yes for years, because the answer at ₹900 is "sure" and the answer at ₹1,000 is a routine "clear thoda, phir aage" rather than a crisis.

Say the number out loud, early

The best moment to mention a limit is the first time you extend credit, when nothing is at stake:

Haan bilkul, le jaao. Main generally ₹1,000 tak udhaar rakhta hoon — usse zyada ho jaye toh thoda clear karna padta hai. Theek hai?

Nobody argues with this. It costs one sentence and it removes every future argument, because when the balance reaches the ceiling you are not making a decision about them — you are applying something they already agreed to.

Compare it with the alternative: saying nothing for two months and then refusing at ₹2,400. Identical policy, completely different conversation. The first is a rule; the second is personal.

Raising a limit

Raise on evidence, not on request — and specifically after three or four complete cycles of borrowing and clearing within the expected time.

Move in steps: ₹1,000 → ₹1,500 → ₹2,500. Doubling on a good month is how you end up over your pain threshold without noticing.

Tell them when you do it. "Aapka record accha hai, ₹1,500 tak kar diya" costs nothing and buys real loyalty — you have just told a customer their reliability was noticed, which almost nobody does.

What should not raise a limit: a customer asking at an awkward moment, a large one-off purchase, a festival, or your own reluctance to have an uncomfortable conversation. Those are the four reasons limits actually get raised, and all four are the reason limits stop working.

Cutting a limit

Sometimes the number has to come down. Signals:

The balance has grown for three consecutive visits with no payment.
They have moved from paying in 10 days to paying in 40.
They are asking for noticeably larger amounts than usual.
Other shops in the market mention they are behind.

That last signal is worth taking seriously. In a local market, information circulates — and a customer who is behind everywhere is not going to make you the exception.

Cut it as a fact rather than an accusation:

Sharma ji, filhaal ₹500 tak hi rakh raha hoon sabke liye — market thoda tight hai. Purana clear ho jaye toh phir badha denge.

Attributing it to your own cash position rather than their behaviour is not dishonesty; it is true, and it lets the customer keep their dignity. A customer who is embarrassed stops coming, which costs you the future margin as well as the outstanding balance.

Saying no to a new customer

This is the refusal shopkeepers find hardest, and the trick is having one sentence you use every single time:

Naye customers ke liye cash rakhta hoon — do-teen baar ke baad udhaar chalu kar dete hain.

Said identically to everyone, it is a policy. Said only to some people, it is a judgement — and customers can tell the difference instantly.

Nearly all genuinely unrecoverable udhaar comes from people with no purchase history: someone passing through, a new face who seemed entirely genuine, a friend of a regular. They are not bad people. There is simply nothing to base a limit on, and a limit with no basis is a guess with your working capital.

Put the limits somewhere you can see them

A limit you have to remember is a limit you will forget at the counter on a busy evening. Write them down — in your khata against each party, or a simple list by the till.

Then, in your weekly review, look for anyone sitting near their ceiling. Knowing that Sharma ji is at ₹900 of ₹1,000 before he walks in is what turns an awkward improvisation into a calm sentence. That review is the same fifteen minutes described in the complete guide to managing udhaar — reading the list is what makes every other habit possible.

And for the balances that went past their limit long ago and are not coming back, when to stop chasing and write it off covers how to close them out without pretending they are still assets.

Frequently asked

What is a safe udhaar limit for a regular customer?: One to two weeks of that customer's normal purchase, and never more than you could absorb losing entirely. For someone spending ₹500 a week that is ₹500–₹1,000. The figure will feel low the first time you say it; that is the point.
Should I tell the customer their limit?: Yes, and early. A limit mentioned casually the first time you extend credit is information; the same limit produced during a refusal sounds like a judgement of them. Say it once, at the start, and you never have to argue it later.
How do I decide a limit for a brand-new customer?: Zero, or a token amount you would not mind losing. A limit is extended against payment history, and a new customer has none. Say it the same way to everyone — "naye customers ke liye cash, phir aage se udhaar" — so nobody feels singled out.
When should I raise someone's limit?: After three or four full cycles of borrowing and clearing on time. Raise it in steps rather than doubling it, and raise it because the history earned it — not because they asked at a moment when you did not want to refuse.
What if my competitor gives unlimited udhaar?: Some of them are quietly going out of business doing it. A shop with disciplined limits and healthy cash outlasts one financing its customers indefinitely. Compete on stock, price, and service — financing is the one thing you cannot win by doing more of.