Finance Dictionary : Overdraft Facility


Explore the utility of an Overdraft Facility, a financial arrangement that enables businesses and individuals to access funds beyond their account balance for short-term financial needs.



Overdraft Facility – A Flexible Financial Arrangement


An Overdraft Facility represents a financial arrangement offered by a lender that grants a business or individual the flexibility to withdraw funds exceeding the available balance in their account. It serves as a convenient credit extension, allowing account holders to cover expenses or financial obligations when their account balance is insufficient.


Overdraft facilities are valuable tools for managing cash flow, helping businesses and individuals address short-term financial gaps without the need for a formal loan application. They can be particularly useful for unforeseen expenses, avoiding bounced checks, or ensuring a seamless flow of financial transactions.


Understanding overdraft facilities is vital for those seeking flexible credit options, and it can offer a valuable safety net in financial management.


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