An overdraft facility allows you to overdraw your cheque account up to an approved limit.
- The overdraft facility is granted for a fixed period of time and you must repay the total amount outstanding at the end of that period
- Your overdraft limit is reviewed every year
- The interest rate that you are charged is negotiable
- Interest is calculated and payable on the daily balance, which means you are only charged on the facility you actually used
- An overdraft takes care of your short-term cash flow needs by extending a credit limit on your current account
- It can be used to manage cash flow, your projects and seasonality in your business
- The minimum security requirement is the personal suretyship of the principal