This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.
A business overdraft facility is a flexible borrowing arrangement that allows a business to withdraw more money than is available in its bank account, up to a pre-approved limit. It is a form of short-term credit designed to help businesses manage cash flow, cover unexpected expenses, or bridge gaps between income and expenses.
Pre-agreed Limit: The bank sets a maximum amount the business can overdraw.
Interest Charges: Interest is typically charged only on the amount overdrawn, not the full limit.
Fees: Some banks charge arrangement or renewal fees for maintaining the overdraft.
Repayment Flexibility: Funds can be repaid at any time, reducing interest costs.
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