February 16th, 2017.



For a long time, business overdrafts were the most popular way of managing short-term cash flow. You’d have an overdraft attached to your business bank account, and if you needed some extra cash you could simply overdraw your account for a few days or weeks until things evened out again.

These days, it’s often not so simple. The banks don’t offer overdrafts as much as they used to —  research shows that small business overdrafts are being consistently reduced or removed — and in this context you might not want to rely on one even if you can get it, knowing that the bank can call it in at any time.

The alternative finance market has a few other options, so let’s take a look at the best alternatives to a business overdraft that you can use to manage your cash flow.

Revolving credit facilities
The closest equivalents to overdrafts are collectively known as ‘revolving credit’. Like overdrafts, they’re characterised by a pre-agreed limit that you can draw whenever you like. The main difference is that a credit facility isn’t usually attached to your bank account — you’ll log in to an online portal and choose how much to draw from your limit.


For the full story at smallbusiness.co.uk CLICK HERE.