What is an unsecured Business Overdraft?

18 Mar, 2020 | Business Overdraft

As revolving facilities, business overdrafts are highly flexible and convenient funding solutions if a business’ funding requirements change regularly or there is some volatility in cash flow. A business overdraft is a revolving loan with a pre-agreed credit limit, allowing a business to draw on funds up to that limit.

What does ‘unsecured business overdraft’ mean?

Business overdrafts typically require security in the form of residential or commercial property, personal guarantee, term deposits or some form of cash asset to guarantee the line of credit. An unsecured business overdraft, in contrast, would require no security or property collateral, up to the approved credit limit. Depending on the strength of your application and the approved credit limit, in some cases you could also apply for an unsecured business overdraft without a personal guarantee.

All things considered, unsecured applications should make the approvals process simpler and faster.

Unsecured Business Overdraft alternatives

The GetCapital unsecured Business Overdraft is a traditional bank overdraft alternative.

As a revolving facility with no fixed term limits, the GetCapital Business Overdraft can be unsecured up to $150,000. The facility can be linked to any of your everyday business transactional accounts, to a limit of $150,000, without having to put up your property as security.

It’s a completely flexible line of credit to improve your business cash flow with the following features:

  • No need to set up a separate account; use any existing business transaction account
  • Draw down funds if and when you need them, within the agreed limit of your overdraft
  • Only pay interest on the funds you use
  • Principal & interest repayments can be weekly or monthly
  • There is just one annual fee – $395
  • Fast and easy process, with approvals within 24 hours.

Unsecured Business Overdraft interest rates

Overall interest rates on traditional business overdrafts are relatively high. This means that overdrafts should not be used as “core debt” solutions or to be perpetually drawn. If core debt is to be used as part of your business’s capital structure then this is best served by a term loan or similar longer term facility.

The GetCapital Business Overdraft has a tiered pricing structure based on annual business turnover from 10.95% to 24.95% annual percentage rate, starting with businesses with $250,000 annual turnover to those with more than $10 million in annual revenue.

How to apply for an Unsecured Business Overdraft

The application process for unsecured Business Overdrafts up to $150,000 with GetCapital is quick and straightforward. Answer just a few questions along with the following requirements:

  • Completed application form
  • 6-months of bank statements for all business-related accounts
  • Copy of the trust deed (if applicable)

Need a larger Business Overdraft?

Perhaps you need access to more than $150,000? When you make your application, in addition to the documentation above, you will also need to provide:

  • Up-to-date financial statements (including aged accounts payable and accounts receivable)
  • A copy of the ATO portal

For Business Overdrafts of over $150,000 and up to $750,000, you might also be required to provide property security and personal guarantees, depending on the strength of your application.

Apply for a GetCapital Unsecured Business Overdraft today and you could have the funds you need tomorrow.

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Categories

Manage Cash Flow

Expand & Grow

Purchase Assets

Payments