The purpose of an overdraft is to allow the account holder access to funds beyond what they hold in their account, up to a specified limit. It is essentially a line of credit that you prearrange with the Bank for use at those times when you need extra cash.
An overdraft is used for Working Capital purposes only and can be considerably cheaper and more flexible than conventional bank loans. Working capital is the funds available for conducting the day-to-day operating of the business, for example salaries, stock, fuel, etc. It ensures you have enough cash to pay your debts and expenses as they fall due.
Business overdrafts can be unsecured for up to £5,000. Security will be required for any applications over this amount.
For more details on what is required for a business loan/overdraft application, please download the ‘Application Guide’ below.
Upon receiving an application and all documentation required, an in depth analysis is undertaken on the business proposal. This process is likely to take 4-6 weeks (20-30 working days) depending on:
A loan application may be declined for a variety of reasons. The Bank reserves the right to refuse or approve loans at its sole discretion, without the requirement to provide a reason for doing so.
A successful applicant will be notified by telephone, email or letter.
If your application is successful, you are required to pay an administration fee to the Bank for work carried out on your application. See the table below for the relevant admin and cancellation fees.
|Up to £5,000||Application Fee||£20|
|£5,001 - £30,000||Application Fee||£25|
|£30,001 - £75,000||Application Fee||£25|
|Administration Fee||0.185% of Loan Amount|
|£75,001 - £150,000||Application Fee||£30|
|Administration Fee||0.3% of Loan Amount|
|Over £150,000||Application Fee||£35|
|Administration Fee||0.5% of Loan Amount|
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