Business Overdraft Facility: What is it?
Need a simple facility designed to provide short term access to immediate cash? To fund large orders, even out seasonal highs and lows or provide cash for upfront investment a non bank business overdraft is the perfect solution.
A pre-agreed credit limit is established and the business is able to borrow up to this limit and repay as often required.
The facility is on stand-by ready to be used or not providing peace of mind that cash is available
With interest being charged at a pre-set daily rate and only when cash is being used it provides a cost effective working capital solution.
- Up to 12 months revolving facility.
- Flexibility to use along side ‘core’ bank lending products.
- Multiple drawdowns and repayments permitted, at no extra cost.
- Pay as you go pricing structure with transparent costs and no set up fee, arrangement fee or ongoing maintenance facility charges.
- Pre fixed credit limit.
- One-off or repeatable transactions.
- Low levels of reporting.
- Only pay for funds used and not those that you may use.
Do I Qualify?
By nature these facilities are higher risk for the lender and as such a more stringent application process is undertaken. However in general you need to answer yes to all of these basic questions to qualify for a business overdraft facility.
- Are you a LTD company, PLC or LLP?
- Are you a UK homeowner or do you have other assets to offer as security for the facility?
- Is your business based in England, Wales or Scotland?
- Have you been trading for at least 2 years?
If you are unsure whether you qualify for this business overdraft facility contact us to talk through your options as other, similar, products may be more suitable such as a Single Invoice Finance facility or a Business Cashflow Loan.
- How is the interest paid?: Interest is accrued on a daily rate while you are borrowing from the facility. Interest is then payable monthly in arrears by direct debit.
- How is the business overdraft repaid?: The amount you are borrowing will generally be repaid when you are able to do so from receipts from your customers or debtors.
- Do I have to repay the whole amount I am borrowing?: Whatever works for your cash flow. Partial repayments of your business overdraft are absolutely fine.
- Is there lots of administration to run the facility?: No. This facility is designed to be as close to a traditional business overdraft as possible. There is no monthly reporting or contact with a client manager as you would have with, for example, an invoice finance facility.
How Oakmead Finance can help
With over 20 years experience in structuring facilities across all sectors from startup businesses to corporate entities, we are best placed to advise and structure the right facility for you.
Contact us if you would like to explore whether a business overdraft is suitable for your business.
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Oakmead Finance Ltd is a company registered in England & Wales with company number 09478864. The registered office address is Lynwood House, Crofton Road, Orpington, BR6 8QE
Invoice Finance facilities are not regulated by the Financial Conduct Authority.