Overdraft Accounts

Overdraft Accounts are basically current accounts with authorized limits used by businesses and individuals for working capital management.

The size of the overdraft facility, the security provided by the borrower (business assets, personal guarantees provided by the directors or third-party guarantees, covenants etc), the financial standing of applicants as well as the overdraft turnover, are all taken into consideration in the decision for granting or maintaining the overdraft facility from then on. The timeframe for assessing applications for overdraft facilities varies based mainly on the readiness of the company to submit the requested information for evaluation.

Interest charge on the accounts applies twice yearly and is calculated based on the daily utilization of the limit, at a rate agreed with the Bank. The overdraft account additionally bears maintenance fees, interest charged on arrears where applicable, charges for the utilization of uncleared funds, fees related to the provision of professional services and any other expenses related to the operation of the account.

The overdraft limit is renewed on an annual basis and is repayable on demand by the Bank.

Each account is assigned to a Client Relationship Officer who is always there to assist you through the application process and operation of the overdraft thereafter.

Advantages of Overdraft accounts

suitable for short-term borrowing needs
improved financial flexibility to overcome a company’s cash requirements
immediate access to funds once the facility has been approved
no penalty on prepayment
assistance on cash flow management to mitigate business risks by providing interest paid only on the utilized balance
interest and arrangement fees are normally tax deductible
it provides full transaction capability with various facilities (cheque book, electronic banking, cards etc)

Disadvantages of Overdraft accounts

interest charged for the period is not predictable, as it depends on the daily utilization of the limit and variations in the interest rate
overdrafts are repayable on demand
failure to operate the account as per the directives of the Bank can result in a decrease in the client’s credit score, increased interest rate charges for existing and future borrowing, seizure of collateral and legal action against the company
company’s Directors are liable for transactions operated under the account

How to apply

Applicants are required to complete and submit the following:

The Credit Facility Application Form
The Personal Financial Statement (PFS). Where applicable, the PFS must also be completed by all guarantors/security providers
The supporting information/documentation as stated on the relevant document
The relevant checklist for Legal Entities, Self-employed and Freelancers or Natural Persons

For the evaluation of a long-term business credit facility request, all above documents must be submitted to the Bank.

Existing clients

Existing clients may contact their personal Client Relationship Officer (CRO) and communicate their request through email, mail or fax

New clients

New clients have the option of contacting one of our experienced CROs to guide them through the process or by directly submitting their initial request through email, mail or fax