Overdrafts

• Overall


  Convenient and relatively cheap

  Enable a business to overcome temporary cash shortages

  Banks require regular payments to be made and may charge account-keeping fees, establishment fees and interest

  Bank charges need to be carefully monitored, as charges vary depending on type of overdraft

  Businesses should have a policy for using and managing overdrafts and monitor budgets on a daily or weekly basis so that cash supplied can be controlled

  Interest is usually less than a loan