Business Overdrafts are probably still the most common type of finance used by businesses. An overdraft is a line of credit attached to a cheque account which allows business to operate on a day-to-day basis. The use of an overdraft is referred to as "working capital". Overdrafts are charged at a variable rate of interest, with interest being calculated daily on the balance outstanding.
Essentially this facility offers:
- reduced timing differences between payment of creditors and receipt of money from your debtors
- the ability to pay interest only on the funds you use
- a variable interest rate
- fluctuating balance with no set repayments
- access to your funds in a variety of ways including cheque, online or telephone banking
Sometimes collateral is needed for a business overdraft, however some financiers do not require it. While business overdrafts are great for freeing up your liquid capital, they're not necessarily recommended for long-term financing needs as the interest rates can be significantly higher.
The Business and Commercial loans market is very competitive. If you have
any questions that we can help you with, please call at any time on 1300 79 63
69 or click on the Make an Obligation Free link below and one of our experienced
consultants will be in touch with you within 24 hrs.