Overdraft Facility

What is Overdraft?

An overdraft is a credit facility which is used to cover negative gaps in a business’ cash flow. There are businesses which receive payments after 30 days when they need to operate on a daily basis to meet their clients’ needs. To achieve this, an overdraft comes in to provide working capital needed to finance a company’s business operations while waiting for receipt of payments. For collateral, the items used as collateral under loans also serve the same purpose under overdrafts.

For a customer to qualify for any of the above mentioned credit facilities, there are certain requirements needed to be met:

  1. Submission of Audited Books of Accounts for the last three years coupled with latest Management Accounts
  2. Cash flow projection for at least twelve months
  3. Submission of regulatory documentation such as on Certificate of Incorporation, Articles of Association, current VAT Certificate
  4. Submission of a letter of application indicating the facility sought, the purpose, the value (amount) and duration during the facility is expected to run, details of security been offered.
  5. Business Plan
  6. Company Profile

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