Cheque credit for businesses

Overdraft, operating credit or line of credit - the name of the game. An overdraft is ideal when your business needs to parry an uneven cash flow.

With all the VAT, employers' contributions and other taxes that these companies pay to the state, it is sometimes difficult to plan for the economy.

A cheque credit (also called a line of credit, overdraft or operating credit) is a credit that allows a company to borrow money at any time up to a limit. Normally the company pays a limit fee of 0.25%-2.00% plus interest on the part of the credit that has been used. The interest rate on the overdraft varies widely from bank to bank and depends on the creditworthiness of the company.

An overdraft facility allows your company to take the funds you need to meet your short-term business objectives.

When should you use a cheque credit?

If your business has natural fluctuations, for example due to seasonality or large projects that come in at irregular intervals, you may need to borrow money temporarily to meet your company's short-term needs. A common way to deal with these fluctuations is to obtain a so-called overdraft or working capital loan.

An overdraft facility is an agreement with a financial institution that sets a maximum limit (loan ceiling) and where the borrower has the option to use none, all or part of the limit. The company can withdraw money (as little or as much as you want) from the overdraft facility at any time, as long as you do not exceed the maximum limit in the agreement.

An overdraft is similar to a credit card: you use it as you need it. Orders originated in the days when paper cheques were written by hand. You repay the credit at your convenience, and you can borrow or use more of the credit if you have room left up to the limit.

Check credit for start-ups and startups

Getting a line of credit from the bank as a start-up can be difficult. It's often easier to get a business loan online and then increase your credit as you go.

How can I use a cheque credit?

Many companies use overdraft facilities to increase their working capital. Using this type of loan bridges the gap between the company's short-term tasks and incoming cash flow.

The cheque credit is primarily intended to help the company smooth out its cash flow, and not as long-term financing. A cheque credit is usually used for short-term working capital needs, such as covering salaries when you hire new staff, when you want to buy stock for the Christmas season, or when you need extra capital to deliver a large order or to cope with seasonal fluctuations in cash flow.

Is an overdraft a good form of loan for my business?

Of course, the ideal is to have savings stashed away for the day it's needed, so an overdraft is a good option. Overdrafts are meant to help you meet short-term business needs, such as purchasing goods or additional stock or covering operating costs. Used properly, a checking account can help your business thrive and grow.

One advantage of a cheque credit over a traditional loan is that you normally only pay for the part of the credit that you use, although many lenders charge a monthly fee or limit fee in addition to interest. Read what Entrepreneurs think about cheque credits

How can my company get a cheque credit?

It can be difficult to get a bank overdraft. If you have a start-up business or have had payment difficulties, you can apply for a regular business loan with no collateral required. Make sure you don't get locked in and can repay the credit early without having to pay for the whole loan period.

Many businesses are considering modern online lenders, such as Qred, which provide fast and hassle-free business loans to small and start-up businesses and those with less than stellar credit ratings.

While banks may be reluctant to grant business loans to companies with lower credit ratings, you can apply for a business loan with Qred quickly and easily through an automated process - giving you a faster loan approval. Of course, there are other lenders, but at Qred we often have better terms for you.

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About Qred business loans

Our loans have a fixed monthly fee. This means that we have no interest, set-up fees or other hidden charges. What you see is what you get. What's more, you only pay for the time you use the loan. So if you pay back the whole loan after 3 months, you only have to pay 3 monthly fees, and you don't have to pay the remaining monthly fees. Read more about who founded Qred and who works here at about Qred

Is it easy for my customers to apply with you?

The simple answer is - YES! We don't require any more information than we actually need from you. So that you can do what you do best - run your business.

The application takes 1 minute, you receive a reply within 1 hour and the money is paid out the same day. Fast, safe and easy!