What is a business overdraft?
A business overdraft is a type of credit facility that allows businesses to borrow money from a bank to cover short-term cash flow gaps. The overdraft limit is set by the bank, and businesses are allowed to borrow up to that limit at any time. Businesses must repay the overdraft, plus interest, when the cash flow situation improves or when the overdraft is cancelled. An overdraft is an important financial tool for businesses that need quick access to cash.
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