Business Overdrafts

A business overdraft is a flexible credit facility linked to your business transaction account, enabling you to withdraw funds as needed, up to a predetermined limit. This type of revolving credit does not require formal repayment schedules, making it a valuable tool for managing cash flow within a business.

In the case of a business overdraft, interest is charged only on the amount you use. Businesses typically employ this facility to manage expenses such as employee salaries, supplier payments, inventory acquisitions, or unforeseen costs.

Why consider a business overdraft? A business overdraft serves as an effective financial management tool.

Its advantages include:

• Providing immediate access to funds, allowing for quick financial responses as required.
• Enhancing decision-making confidence by ensuring that working capital is readily available for business needs.
• Eliminating the necessity for a separate credit line, as the overdraft is associated with an existing business transaction account (though opening a new account is an option).
• Charging interest solely on the utilised funds, thus avoiding interest payments on unused credit.