Business overdraft
An overdraft for the gaps between payments.
A buffer on the account you already use. Suits a business that needs to cover short gaps between money going out and coming in.
You don’t pay to compare.
No credit file impact · No cost to compare · No obligation
Business overdraft at a glance
- Amount
- $10,000 to $1,000,000
- Term
- No fixed term, subject to an annual review
- Security
- Director’s guarantee; larger limits usually secured
- Time to funds
- Varies by lender
- How you pay
- Interest only on the overdrawn balance, day by day
Indicative, and subject to lender assessment. Your options are typically ready within 24 hours of receiving your documents.
Is it right for you?
When an overdraft fits, and when it doesn’t.
Often fits
- Short gaps between payments on your everyday account
- No separate facility or new account to manage
- You want to pay interest only while you’re overdrawn
- No scheduled repayments: the limit frees up as money comes in
Usually not
- A one-off lump sum, where a term loan may fit
- Funds you draw on purpose into a separate account, where a line of credit may fit
Business funding, compared on real data, in three steps.
How It WorksCompared
Trade Funding or going direct to your bank?
| Trade Funding | Going direct | |
|---|---|---|
| Time to options | Options typically within 24 hours of receiving your documents | One bank’s own process and timeline |
| Rates | Compared across the panel, with the APR beside each | One lender’s own rate only |
| Lender access | Panel of 70+ lenders compared | Single lender only |
What it costs
How you pay, and what it costs.
- Interest
- Charged only on the overdrawn balance, day by day
- Line fee
- Most lenders charge a monthly or annual line fee, around 0.5 to 1.5% of the facility limit
- Rate
- Shown for each option in your report, with the APR beside it; unsecured limits usually cost more
Who qualifies
What lenders look for.
Typical criteria, and subject to lender assessment.
- Monthly turnover
- Entry-level facilities start from around $5,000 a month
- Limit
- Grows with your monthly revenue and trading history
- Unsecured
- Usually needs only a director’s personal guarantee
- Larger limits
- Usually take security, such as property or business assets
Interest calculator
See what sitting in overdraft actually costs.
No fixed term, no scheduled repayments. Interest applies only to what you’re overdrawn by, and the limit frees up again as money comes back in. Adjust the slider for the indicative cost of carrying a balance.
- Rates shown are simple p.a.; your report shows the APR.
- Results are approximate and exclude lender fees. Not an offer of credit.
- Interest-only repayment
- $1,750/mo
- Indicative annual cost
- $21,000
Illustrative only, based on a 14% p.a. indicative rate. Most lenders also charge a monthly or annual line fee of around 0.5 to 1.5% of the facility limit. Your Compare Report shows the exact rate, fees and limit each lender offers your business.
Questions about overdrafts.
How does a business overdraft work?
A business overdraft is a credit limit attached to your business bank account. When your account balance goes below zero, the overdraft kicks in automatically. You only pay interest on the amount you’ve drawn, and as money comes back into your account, the drawn amount reduces. It’s a revolving facility, so you can draw and repay as often as needed.
What is the difference between a secured and unsecured business overdraft?
A secured overdraft uses an asset (typically property) as collateral, which allows the lender to offer a higher limit and lower interest rate. An unsecured overdraft has no collateral requirement but typically comes with a lower limit and higher rate. Your Compare Report will show both options based on your situation.
What does a business overdraft cost?
You only pay interest on the amount actually drawn, and unsecured facilities usually cost more than secured ones. Most lenders also charge a monthly or annual line fee, around 0.5 to 1.5% of the facility limit. Your report shows each option’s rate with the APR beside it.
What is the difference between an overdraft and a line of credit?
They’re very similar. Both are revolving credit facilities where you pay interest only on drawn funds. The main difference is that an overdraft is attached to your everyday business bank account and activates automatically when your balance goes negative, while a line of credit is usually a separate account you draw from intentionally. Some lenders use the terms interchangeably.
How do we get paid?
Comparing costs you nothing. Not comparing can cost you plenty.
The headline rate rarely tells the whole story. Fees, charges and loan terms can add far more to what you repay. That’s why your Compare Report shows every cost we can identify side by side.
In most cases, the lender pays us, and only if you decide to proceed with their product offer. For more complex deals, or where the lender pays us little or nothing, we may charge a fee for our service. It doesn’t happen often, but when it does, it’s shown on your Compare Report and we’ll walk you through it before you decide.
No obligation to proceed, ever.
Related
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No credit file impact · No cost to compare · No obligation
Or talk to us: 1300 161 641 · support@tradefunding.com.au