A business overdraft is a line of credit or revolving facility that becomes available for withdrawals up to a predetermined limit, once the balance in a business transaction account reaches zero.
Businesses find overdrafts useful and convenient, particularly to compensate for temporary cash flow shortfalls or while waiting on payment of invoices. The facility can be typically be used for any business purpose, you only need to pay for funds used and repayments are generally flexible. But like any loan product, it must be repaid according to the agreed terms.
Business Overdrafts are traditionally attached to a business transaction account with the existing bank or lending institution.
In practice this means that a business with a number of different business transaction accounts could sometimes have several overdraft facilities, all tied to different institutions and potentially secured or cross-collateralised with property or guarantees. This can make financial management cumbersome and inefficient.
The GetCapital Business Overdraft solves this problem by using a proprietary Bank Connect technology to link seamlessly to any existing business transaction account, with any Australian bank. And if you change banks – simply link your new account to your GetCapital Business Overdraft.
Here are a few examples of situations that are well suited to Business Overdrafts:
Example 1: A seasonal business that generates most of its revenue in the winter could use a Business Overdraft to fund business activities in the slower summer months.
Example 2: A business could use a Business Overdraft to fund marketing and sales-related expenses ahead of a new product launch. The upfront expenses could be funded by the drawdown on the overdraft with the overdraft paid off relatively quickly once customer sales are made.
Example 3: An importer needing to pay for goods overseas could use an overdraft to fund its upfront investment in inventory, when it has to wait 60-90 days before selling those goods.
GetCapital’s Business Overdraft has some unique features and major advantages, making it a flexible alternative to traditional overdrafts, namely:
Find out more about GetCapital’s Business Overdraft.
You can apply for a business overdraft with a limit up to $750,000. The process is straightforward:
You can get started online now, and have the funds you need to keep your business moving and growing.