small-biz-owner

How to access working capital if you have a bank overdraft

Have you maxed out your overdraft account, and still need more funding? Get quick access to the working capital you need with several alternative financing options.

When it comes to maintaining short- and long-term cash flow liquidity, every business has its own unique needs, but there is quite a lot each business can do to survive rough business fluctuations.

Most businesses already have an overdraft account with their bank. But when that dries up, where do you get financing from? Whether you need working capital to grow your business, fill large orders, make payroll or to simply have access to emergency funding, there are several ways to get the capital you need for your business.

NAB QuickBiz Loan Offer

NAB QuickBiz Loan Offer

From

12.95 % p.a.

fixed rate

  • Borrow up to $100,000
  • Fast application and turnaround
  • Sole traders, partnerships and companies can apply
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100% confidential application

NAB QuickBiz Loan Offer

An unsecured business loan up to $100,000 you can apply for in minutes.

  • Interest rate from: 12.95% p.a.
  • Interest rate type: Fixed
  • Application fee: $0
  • Minimum loan amount: $5,000
  • Maximum loan amount: $100,000
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Business lenders you can compare

Rates last updated November 14th, 2018
Name Product Min Loan Amount Max. Loan Amount Loan Term Application Fee Product Description
NAB QuickBiz Loan
$5,000
$100,000
1 to 3 years
$0
Apply for up to $100,000 and get a response within 60 seconds. No upfront or ongoing fees and a transparent fixed rate.
Lending Express Business Loans
$5,000
$500,000
0.25 to 2 years
$0
Apply online for up to $500,000 and get access to over 25 lenders through Lending Express.
Valiant Finance Business Loan Broker
$5,000
$1,000,000
0.25 to 5 years
$0
A Small Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 60 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Note: If you apply and have your loan settled in November 2018, you will recieve $250 cash-back.
Moula Business Loan
$5,000
$250,000
0.5 to 2 years
$0
A loan of up to $250,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.
GetCapital Flexible Business Loan
$5,000
$500,000
0.5 to 2 years
Initial draw down fee
A flexible business loan up to $500,000 with convenient top up and redraw facilities. Business must have been operating for 9 months+ and have monthly sales of $10,000+
businessloans.com.au Flexible Business Loan
$5,000
$500,000
0.5 to 2 years
Initial draw down fee
A business loan up to $100,000 for unsecured loans, or $500,000 for secured loans that you can use for any business purpose. Transparent costs and redraw facility available.
OnDeck Business Loans
$10,000
$250,000
0.5 to 2 years
2.5% origination fee
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.

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Will my business be eligible for extra finance if I have a bank overdraft?

One of the most common business banking facilities is an overdraft. This type of financing ranges anywhere from $50,000 to $200,000 and is usually secured by property or other assets. Many businesses may come across situations where they need more funding but their bank doesn’t approve the loan. This is usually because their secured assets only allow a certain funding limit.

If you’re in a position where your bank won’t increase your overdraft, you may still be eligible for extra financing, although it does depend on factors such as credit history, type of financing, assets and accounts receivables. Nonetheless, there are a host of options you can choose from.

What finance options can I consider if I have a bank overdraft?

Common financing facilities include lines of credit, charge cards and term loans. A host of non-bank lenders also offer non-traditional facilities such as invoice financing. In the end, the right decision should be based on your own situation, so consider your options carefully.

  • Line of credit. Here, your lender approves your credit up to a maximum limit. Repayments are made only based on the amount you withdraw and interest is charged on this amount. You’ll also likely pay an annual fee.
  • Charge cards. These help manage day-to-day expenses by allowing you to charge transactions to a card. However, the amount borrowed must be paid in full by the end of the month. Although no interest is charged, you are required to pay an annual fee.
  • Term loans. These are secured or unsecured lump-sum loans, with the full amount disbursed upfront. You’ll make fixed monthly repayments according to a predetermined schedule for the loan to be paid in full, with interest, by the end of the term (anywhere between one and seven years).
  • Invoice financing. This is an unsecured facility where you can get up to 85% of your invoices paid upfront from a factoring company, rather than waiting the full 30 to 60 days to receive payment from customers. Invoice factoring, which involves the financier collecting the invoice payments directly, is also an option.

What should I consider before I apply?

In addition to considering your own business situation, ask yourself the following questions before applying for other financing options:

  • What do I need the loan for? If you need a large amount of cash for a one-time payment to buy equipment or for covering large customer orders, perhaps a term loan or invoice factoring would be suitable. If you need an ongoing sources of funding, a line of credit, charge card or invoice financing may be more appropriate.
  • How much will it cost me? Be aware of all upfront and ongoing fees charged by your lender. Also, make sure you know the interest rate and whether it’s fixed or variable. You can also use the comparison rate, which combines a lender’s interest rate and fees, to better compare options between lenders.
  • What about my lender? There’s been a surge of non-bank lenders offering alternative sources of financing, so make sure you know the reputation of the lender to ensure it is legitimate. Also, be aware of all upfront and hidden fees before signing your name on the dotted line.

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