Overdraft Facility

What is it?

  • An Overdraft is a revolving credit facility which provides businesses with a standby credit line.
  • It allows you to draw on the amount up to an agreed limit anytime or as required.
  • It functions just like a credit card in that interest is charged only when you draw on it and according to the amount drawn.
  • The Overdraft credit limit available reduces as it is drawn down.
  • The full credit limit is restored once full repayment is made.
  • Usually there are no charges if the overdraft unutilized.

How it benefits you?

  • Businesses with tight cash flows will benefit from this standby credit line which can be accessed immediately.
  • It is an ideal instrument to serve as a reserve for your daily operational funding needs.
  • Companies with quick rapid sales turnovers will find Overdrafts as a perfect low cost solution for their credit terms offered to their clients.

Key Facts

  • High Overdraft amounts of up to S$300,000.00.
  • Usually little or no collateral is required.
  • Approvals within 1 or 3 days.
  • Upon approval, it takes about 7-21 working days to set up the account.

Interest Rates

  • Indicative Effective Interest rates of about 12%p.a. to 14%p.a. is computed on the outstanding drawn amount and the overdraft limit that is awarded.
  • Some lenders may impose a one-time processing fee of about 1.5% – 1.99%  of the approved amount.
  • Additional costs may also include an annual fee of about 1.5% of the approved amount.
  • Total interest costs can be reduced by repaying the balances as soon as possible.

Who is eligible?

  • Suitable For Sole Proprietors, Partnerships, Private Limited Companies.
  • Minimum 3 years of business operations.

What you need to apply?

  • Photocopies of Sole Proprietors’, Partners’, Principals’ Identity Cards and/or Passports.
  • Company’s operating bank current account statements for the past 6 months.