Corporate Finance Advisory

Bank Overdraft

Bank overdraft, also known as cash credit, is an extensively used means of short-term financing, which may be exploited by SME’s and large corporations alike. It is a credit facility granted by a commercial bank to clients that require flexibility in handling their business. The borrower can utilize the facility by overdrawing its account up to the permitted overdraft limit.

This credit facility is considered to be flexible because an interest rate is charged by the bank, only on the portion of money that is actually used and not on the total amount that is granted. This feature also makes bank overdrafts cost-effective, provided the borrower continually deposits inward cash flows, as soon as they are received, to save on interest costs.

We at MPG can assist you in obtaining a bank overdraft for your company to increase your flexibility in running your daily operations.