Business Overdraft Credit Facilities: The Complete Guide

Business overdraft facilities can be used as a means of borrowing, and a cash flow solution for a business. They can be used instead of business loans as you are only paying for the balance of the overdraft that you are using rather than funds that have not been deployed.

Benefits

• Easy access to funds and arrangement process.
• Interest only payable on the overdraft balance (usually daily).
• No set minimum to pay back on a monthly basis.
• Can be used in emergencies.

Disadvantages

• Higher interest rates than business loans.
• Interest rate is often variable.
• Bank may withdraw the facility if not used.