Business Overdrafts
Be financially flexible with a business overdraft.
Business Overdraft
Setting up an overdraft for your business gives you financial flexibility and support when it matters.
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Benefits of a Business Overdraft
A Business Overdraft can give you financial flexibility when you need it, could help you get your business off the ground, manage your cash flow and cover any unexpected costs.
16.77% EAR representative* (varies with Bank of England Bank Rate) for unsecured overdrafts up to £25,000
EAR stands for equivalent annual rate. It is the rate you would pay if you go overdrawn to the full limit of your authorised overdraft for the entire year. It takes into account the interest rate you are charged as a result and how often it’s charged – in this case interest is calculated daily and charged monthly. It then considers the effect of compound interest (charging interest on your interest) on your debt.
Please be aware that charges apply. The interest rate and fees are set out in the table below. Charges for unauthorised borrowing are charged separately.
|
Limit Band |
£500 - £5,000 |
£5,001 - £25,000 |
£25,001+ |
|---|---|---|---|
|
Limit Band Rate |
£500 - £5,000 10.85% per year above Bank of England Bank Rate |
£5,001 - £25,000 10.85% per year above Bank of England Bank Rate |
£25,001+ Rates will be discussed on application |
|
Limit Band Fee |
£500 - £5,000 £12 monthly usage fee |
£5,001 - £25,000 1.99% annual fee (minimum fee £150) |
£25,001+ Annual fee – discussed on application |
*EAR representative and contextual information
The representative EAR is an illustration of the rate that the majority of customers will receive. If an overdraft is described as having a particular representative EAR, then we expect to offer that rate or better to at least 51% of the applicants we accept. Other customers may get a different rate based on their individual circumstances. Our representative EAR applies to all unsecured overdrafts with a borrowing amount of up to £25,000 for businesses with a turnover up to £25 million. This figure is not necessarily the rate you will be receiving and is for illustrative purposes only.
Unauthorised rates and charges
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If you overdraw on your account, or exceed an overdraft limit without prior agreement, you'll be charged an Unauthorised Borrowing Interest (UBI) Rate which is 10.85% above the Bank of England Bank Rate.
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We'll stop a payment if you do not have the money available in your account. You'll be charged a fee of £7 for each payment we can’t make. We stopped charging these fees temporarily in September 2022, but resumed charging them on 10 April 2024.
Borrow up to £5,000 for your new business
You could apply for up to £5,000 across a Business Overdraft or Business Credit Card when you open a new Business Current Account**. This could help you get your business off the ground, build your credit rating and cover any unexpected costs.
Bank Accounts for start-ups and small businesses
**Apply online once your new Business Current Account is set up and you’ll get an instant decision. Eligibility for lending will be assessed as part of a separate application, and there is no guarantee of lending being granted. All lending is subject to status.
Frequently asked questions
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Overdrafts can be useful in helping to cover unexpected costs or large outgoings when the money flowing into your business isn't there to support them at that moment. An arranged overdraft differs from a loan in that you can repay it and use it again. You can pay back an overdraft as and when you're able to, but fees may apply. You may also be able to increase your overdraft limit depending on your business needs.
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To get a Business Overdraft, you’ll need to have a Business Current Account. It’s always a good idea to check the eligibility criteria first. We'll stop a payment if you do not have the money available in your account. You'll be charged a fee of £7 for each payment we can't make.
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No, you’ll have to apply for a Business Overdraft as an existing Business Current Account holder.
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No, you'll only be charged interest on the amount you borrow, regardless of your total borrowing limit. However, if you exceed this limit then unauthorised borrowing charges will apply. Fees for Business Overdrafts over £5,000 will be calculated on the full overdraft limit.
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Find out how The Drinks Club used Invoice Finance to boost their cash flow and helped them grow from a start-up in a shed to a full beverage solution.
9 ways to improve cash flow
Effective cash flow management is essential to ensure your business thrives. Read our tips, including getting the right funding in place.
Lending appeals
The right type of funding can play a vital role in helping your business reach its potential. If your lending application is declined, we will work with the British Bankers’ Association to pursue any raised appeals.
ANY PROPERTY GIVEN AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER DEBTS SECURED ON IT.
All lending is subject to a satisfactory credit assessment and we will need your permission to carry out a credit check on you and your business.
You should not apply for an amount that you cannot comfortably afford to repay now and in the future to avoid the possibility of legal action.
All lending is subject to status. Security may be required.