Every business needs some ‘wriggle room’ from time to time. An arranged business overdraft is often unsecured and can be a low interest way to access credit for your business. If you’re currently shopping around for the best business overdraft available, these are 17 of the best connected to business current accounts.
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Companies are ranked in no particular order.
| Bank | Borrowing Limit | Fee | Interest Rate |
|---|---|---|---|
| Barclays | Up to £50,000 | £95 - £295 OR 1.6 - 2.5% | Rep EAR 10.45% |
| NatWest | £500 to £50,000 | 1.5% (a minimum of £150) | Find out when you apply |
| HSBC | Find out on application | From £25 | Representative EAR of 9.9% variable |
| Lloyds | Up to £25,000 | Either £10 per month OR a 1.75% annual fee (min £120) | 11.02% EAR representative |
| Metro Bank | Up to £25,000 | 1.75% or £50, whichever is greater. | 10% EAR |
| Bank of Scotland | Up to £25,000 | Either £10 per month OR a 1.75% annual fee (min £120) | 11.02% EAR representative |
| Yorkshire Bank | Up to £25,000 | 2.5% establishment fee (£120 minimum) | 9.7% representative EAR. |
| TSB | Apply for details | Apply for details | Apply for details |
| Santander | £500 to £25,000 | Annual fee of 1% of the agreed overdraft (£50 minimum) | Representative 5.75% EAR |
| Royal Bank of Scotland | £1,500 plus | £50 to £100 arrangement fee | Apply for details |
| Ulster Bank | Up to £25,000 | 1% arrangement fee. £150 minimum. | 7.98% representative EAR. |
| Co-operative Bank | Up to £250,000 | 1.5% arrangement fee (£50 minimum) | 6.97% Variable (for overdrafts up to £25,000) |
| Clydesdale Bank | Apply for details | 2.5% establishment fee (£120 minimum) | 9.7% representative EAR |
| Allied Irish Bank | Up to £25,000 | 1.5% arrangement fee (minimum £500). Renewing or increasing charged at 0.5% minimum. | 5.9% EAR (variable) representative |
| Starling Bank | Up to £10,000 | No fees | 15% EAR |
1. Barclays
- Available with Barclays business current accounts.
- Unsecured overdraft available up to £50,000.
- Arrangement fee applies.
- Fees vary depending on your arranged limit.
- Apply to increase or decrease whenever you need to.
Website: Barclays Business Overdrafts
Read the full Barclays Business Account review.
2. NatWest
- Available with NatWest business current accounts.
- £500 to £50,000 unsecured facility available.
- No set minimum repayments.
- Arrangement fee applies.
- Reviewed annually.
Website: NatWest Business Overdraft
Read the full NatWest Business Account review.
3. HSBC
- Available with HSBC business current accounts.
- Limits and fees not available on the website, apply for more info.
- Reviewed annually.
- Arrange over the phone or in-branch.
Website: HSBC Business Overdraft
Read the full HSBC Business Account review.
4. Lloyds Bank
- Available with Lloyds Bank current accounts.
- Arrange an overdraft up to £25k.
- They approve 9 out of 10 businesses.
- Free to set up if your limit is £5,000 or less.
- Only pay interest on the funds you use.
Website: Lloyds Bank Business Overdraft
Read the full Lloyds Bank Business Account review.
5. Metro Bank
- Available with the Metro Bank current account.
- Up to £25,000.
- Fees are stated up front.
- Arrange it in-branch.
- Annual review applies.
Website: Metro Bank Business Overdraft
Read the full Metro Bank Business Account review.
6. Bank of Scotland
- Available with Bank of Scotland business current accounts.
- Up to £25,000 available.
- Free to set up an overdraft of £5,000 or less.
- Transparent fees.
- Only pay interest on the funds you use.
Website: Bank of Scotland Business Overdraft
Read the full Bank of Scotland Business Account review.
7. Yorkshire Bank
- Available with Yorkshire Bank’s business current accounts.
- Up to £25,000 available.
- Security may be required.
- Short term facility for 12 months.
- Straightforward fees.
Website: Yorkshire Bank Business Overdraft
Read the full Yorkshire Bank Business Account review.
8. TSB
- Available with TSB’s business current accounts.
- Limits and fees not advertised.
- Only pay interest on the funds you use
- Can apply for an amount that suits your business and its needs.
Website: TSB Business Overdraft
Read the full TSB Business Account review.
9. Santander
- Available with Santander’s business current accounts.
- Arrange an overdraft of £500 to £25,000.
- Only pay interest on the amount you borrow.
- Annual fee applies.
Website: Santander Business Overdraft
Read the full Santander Business Account review.
10. Royal Bank of Scotland
- Available with the Royal Bank of Scotland’s business current account.
- Facility of up to £50k available.
- Reviewed every 12 months.
- Arrangement fee applies.
Website: Royal Bank of Scotland Business Overdraft
Read the full Royal Bank of Scotland Business Account review.
11. Ulster Bank
- Available with the Ulster Bank business current account.
- Businesses must be registered in Northern Ireland.
- Arrangement fee applies.
- Short term solution for 12 months.
- Security could be required.
Website: Ulster Bank Business Overdraft
Read the full Ulster Bank Business Account review.
12. Co-operative Bank
- Available with the Co-op’s business current accounts.
- Up to £250,000 available.
- Apply easily for up to £25,000.
- Can be secured or unsecured.
- Arrangement fee applies.
Website: Co-operative Bank Business Overdraft
Read the full Co-operative Bank Business Account review.
13. Clydesdale Bank
- Available with Clydesdale Bank’s business current account.
- Up to £25,000 available.
- Arrangement fee applies.
- Short term facility for up to 12 months.
Website: Clydesdale Bank Business Overdraft
Read the full Clydesdale Bank Business Account review.
14. Allied Irish Bank
- Available with Allied Irish Bank business current accounts.
- Up to £25,000 available.
- An arrangement fee applies.
- Credit limit will be agreed based on your business’ needs.
Website: Allied Irish Bank Business Overdraft
Read the full Allied Irish Bank Business Account review.
15. Starling Bank
- Available with the Starling Bank business current account.
- Up to £10k available.
- No fees.
- Manage your limit within the app.
- Charges are capped.
Website: Starling Bank Business Overdraft
Read the full Starling Bank Business Bank Account review.
16. Unity Trust Bank
- Arranged overdrafts available with the business current account.
- Find out if you’re eligible online.
- Limits and fees on application.
Website: Unity Trust Bank Business Overdraft
Read the full Unity Trust Bank Account review.
17. Danske Bank UK
- Arranged overdrafts available with the business current account.
- Two rates available – Bank of England Bank Rate and the 3 month LIBOR.
- 14.59 – 16.59% arranged overdraft interest rate.
- Set up fee applies.
- Limit is reviewed every 12 months.
- Security may be required.
Website: Danske Bank UK Business Overdraft
Read the full Danske Bank UK Account review.
How much can I borrow using a business overdraft?
Overdraft limits vary, but commonly range from £500 to up to £25,000. Some businesses can apply for larger amounts and will be assessed based on their circumstances and needs.
How much do business overdrafts cost?
Just like any other type of credit, there’ll be interest to pay on the amount you use. Most business overdrafts also have an arrangement fee, which will be paid when you set up the overdraft facility. There will often be a charge for reviewing the overdraft each year.
What details will I need to provide to get a business overdraft?
Your bank will conduct a credit search on your business. They’ll also the information they already have with your current account, including incoming cash, outgoings, and other financial data. To apply, you might need to provide some extra information about the business and its director/s, but it’s usually a fairly fast process.
Can I get a business overdraft if I already have a business loan?
Sometimes, yes. Your bank may suggest a loan instead of an overdraft if it will suit your needs better. If you already have a loan with your bank, they will review this before they accept your overdraft application.
Are business overdrafts the best way to borrow money?
Depending on the terms and the interest rates, business overdrafts can be a good way to borrow money. but not universally. Before you commit, it’s important to assess what you need the credit facility for, what it will cost, and if you can get a better deal elsewhere.
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