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Also referred to as working capital facilities, this is a term that is used to describe a collection of lenders and products designed to help with short term cash-flow solutions.

A business overdraft gives you flexible access to cash when you need, and you only pay for the amount you borrow. Newer lenders on the market usually have online accounts where you draw down and pay back. You are charged monthly on the amount you borrow that calendar month.

Business overdrafts can be a really useful way of accessing working capital when you need the cash quickly. For other businesses, they’re more like a safety net that is used rarely, but invaluable in times of need. These overdrafts are not used to buy long-term assets or investments and are, instead, used to provide the working capital that covers a company's short-term operational needs. Those needs can include costs such as payroll, rent, and debt payments.

Benefits

  • Think BulbYou can borrow and repay quickly
  • Think BulbUnlikely to have restrictions on the finance
  • Think BulbIdeal to deal with cash flow problems
  • Think BulbShort term
  • Think BulbNo collateral for borrowers with a good credit history

Limitations

  • Think BulbAssets as collateral may be required for borrowers that cannot establish reassurance to the lender through credit history
  • Think BulbHigh interest rates
  • Think BulbQuick repayment

Case Study

A technology company based in Queensway, London sell an extensive range of technology and computing products through their website and retail shop.

The business build bespoke computers for clients; from office, home, and gaming. Using high-quality parts their computers are reliable, and high in performance; whether the customer opts for high-end or affordable.

After 2 years in business, the director of the company wanted to buy more parts in order to build more computers to sell. However, the client did not want to impact their cash flow, that’s when they approached us seeking advice.

One of our experts spoke with the client and agreed the best option would be a business overdraft.

Benefits of using a business overdraft

  • Think BulbAble to get the funds quickly and repay quickly too
  • Think BulbThe client did not have restrictions on the finance
  • Think BulbShort term
  • Think BulbNo collateral was involved

The funds were with the business quickly which enabled them to get more stock and materials to sell onto their customers. Since then, revenue has increased by over 25% proving to be a very successful business.

To see whether you are eligible for a business overdraft, complete the loan journey below to get a result in a matter of minutes. The journey will also tell you alternative types of funding that your business is eligible for.

To get started with your application process reach out to a member of our team. If you would rather speak to one of our experts directly to discuss your requirements in more detail call 0203 880 9880.

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If you would rather talk to someone, you can call us on 0203 880 9880