A Business Overdraft in Singapore is a flexible line of credit for SMEs to manage daily cash flow needs. It allows businesses to overdraw from their business current accounts up to a pre-approved credit limit. The credit limit is typically based on the business’s revenue, financial stability, and repayment capacity.

Business Overdrafts are primarily used to cover short-term cash flow gaps and unexpected expenses. Businesses can use the overdraft facility to pay for bills, make purchases, or cover other operational costs when their account balance falls below zero.

Interest is charged on the overdrawn amount. The interest rates for an unsecured Business Interest rates are typically EIR 10% per annum, calculated on a daily basis. This is favourable for companies that require short term usage and prefer paying lesser interest to the banks.