Business overdraft

The cost of a business overdraft depends on the lender and how you use it. Typical charges include interest, establishment fees, monthly/annual fees, and over-limit fees.

Yes, sole traders can apply for a business overdraft, although eligibility will depend on factors like your trading history and turnover, personal and business credit score, and cash flow.

If you go beyond your approved limit, you may be charged an over-limit fee. Your lender may reduce your facility or ask for immediate repayment, and your credit score could also be negatively impacted. Setting up alerts or auto-transfers can help you avoid going over the limit.

Overdraft repayments are automatic, with money deposited into your business transaction account instantly reducing the overdraft balance. There’s no fixed minimum repayment, but you are expected to restore the credit balance from time to time.

Yes, you can typically repay a business overdraft early without incurring any prepayment penalties.