Bank Overdrafts

  • Created by: TAJ256
  • Created on: 03-02-23 13:39
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  • Bank Overdrafts
    • What is it
      •  Where a bank agrees that money can be burrowed by the business up to an agreed limit as and where requiredled
      • An external short term source of finance
    • Evaluation
      • Pros
        • Good if the business doesn't receive customers payment quick enough
        • If there is a large delivery that needs to be paid for
      • Cons
        • Carries high interest rates
        • The bank can call in the overdraft at any time and force the business to pay it back, in extreme cases this can cause business failure
    • Who provides these?
      • Banks
    • Who is this suitable?
      • Any company including unoncorporated companies
    • Factors affecting the choice of this source of finance
      • A business would use it if cash flow was poor
      • Untitled




This diagram is very explanatory. It explains quite clearly how banks work. In particular, bank overdrafts. A few months ago, I wanted to take out a bank loan. But to my surprise, the form I had to fill in was quite complex. In my research, I found loan apps for bad credit . Some very close friends told me that this is one of the best options for lending money. So I did some in-depth research on the subject, and eventually realized that they were right.



When there is visualization, it is always easier to understand something. The same goes for finances. When you can clearly visualize all expenses, income and other cash movements, it is much easier to control your finances. Well that's my opinion.

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