About our overdrafts
Business overdrafts from £500-£25,000
Only pay interest on the amount you borrow on the days you’re overdrawn
Eligibility
- You have a Santander business current account
- Your business is registered in the UK
- All directors, owners (shareholders) or partners are aged 18 or over and UK residents
- You’re a sole trader or your business is a partnership, limited liability partnership, private limited company
- You haven’t been a disqualified director or a director of a failed business within the last 6 years
- You have a good credit history and haven’t been declared bankrupt.
The company, directors, owners or partners have not had an Individual Voluntary Arrangement in the last 6 years.
Arranged overdraft
(Subject to status)
- 10.00% EAR (variable)
- Short term borrowing for those unexpected costs
- Annual fee 1% of the agreed overdraft (minimum fee £50)
To apply for an overdraft, call to speak with a member of our business banking team.
To apply you'll need to provide the following:
- Your business turnover for the last 12 months
- Your business costs for the last 12 months
- Total debt repayments per annum
- Personal drawing requirements per annum
- Anticipated business turnover and business costs for the next 12 months
Understanding your overdraft
An arranged business overdraft is borrowing through your business current account. This acts like a short-term safety net when your business cash-flow needs a little extra support. You pay an annual fee, and interest on what you use. This can be expensive compared to other borrowing options.
Did you know, you incur debt when you use your arranged or unarranged overdraft. As with any other debt, managing an overdraft and keeping costs under control are crucial. It can be expensive to use an overdraft for long term as the interest can mount up.
- When you apply for an Arranged Business Overdraft with us, we will look at your circumstances. We will then let you know if you can have one, and how much you can borrow. You must repay any overdraft when we ask you to in line with our General Terms and Conditions.
- It's important to remember that different business current accounts have different overdraft interest and charges.
Arranged and unarranged overdrafts – how they work
Here’s an example of how it works for a customer with a £1,000 arranged overdraft (your specific fees may vary).
Regular use of an unarranged overdraft could have an impact your credit file.
Below you will find some advantages and disadvantages of using an overdraft:
| Advantages | An overdraft is flexible – you can borrow what you need at the time. It's quick to arrange. No early repayment charge. |
|---|---|
| Disadvantages |
|
There are fees associated with overdrafts on the 1|2|3 Business Current Account and Business Current Account.
Overdraft interest rates and fees
| Interest and charges | |
|---|---|
| Arranged overdraft annual fee | 1% of agreed overdraft (minimum fee £50) |
| Arranged overdraft interest rate | 10.00% EAR (variable) |
| Unarranged overdraft interest rate | No interest |
| Unpaid item fee | No fee |
| Paid item fee | No fee |
If you have a Business Everyday Current Account (no longer on sale), you have different rates and fees (PDF - 689 KB)
We’ll let you know at least 30 days before we debit your annual renewal fee and at least 14 days before we debit your monthly charges and interest.
Please read the full product details and terms & conditions before applying. Other borrowing options are available. See our business borrowing and finance options to find out more.
To help you understand the cost of an overdraft in pounds and pence, we've created a table. It shows how much the cost of borrowing £1,000 through an arranged business overdraft costs for each of our products. If you borrow more than this or for a longer period, the cost will be equal to or higher.
These figures relate to arranged overdraft interest costs. You will need to consider the annual fee of 1% of the agreed overdraft limit (minimum £50) which is not included in the table below.
| Cost of borrowing £1,000 through an overdraft | For 7 days | For 30 days | For 60 days |
|---|---|---|---|
| 1|2|3 Business Current Account, Business Current Account (all tariffs) | £1.84 | £7.87 | £15.75 |
| Business Everyday Current Account | £4.32 | £18.51 | £37.11 |
These illustrations assume you’re £1,000 into an arranged overdraft from the first day of the period of illustration. It assumes you don’t make any withdrawals or deposits. Your statement period starts on the first day of the period of illustration in a 30-day month.
We offer current accounts with different overdraft interest rates. We also have other borrowing options such as business credit cards. You can learn more by visiting our borrowing and finance page.
If you have an arranged overdraft with us, we’ll normally charge you an arranged overdraft interest rate for each day you use it.
If you incur charges, we'll let you know on your monthly billing statement. These will include details of the transaction(s) that caused the fees and the date they'll be taken from your account.
You’ll be charged interest if you use your arranged overdraft within your agreed limit. If you go beyond your limit, you won’t be charged any interest on the portion of the balance that's above your limit. However, arranged interest will still apply to the portion of your balance within your limit.
Your overdraft annual fee is charged at 1% of the agreed overdraft limit (minimum £50). This will be taken when your overdraft is applied to your account and on renewal each year, if applicable. Whether or not we agree to give you an overdraft will depend on your circumstances. You must repay any overdraft when we ask you to in line with our General Terms and Conditions.
Everything you need to know before you apply
The documents below have important overdraft information, so we recommend reading them before you apply. You should save or print them so you can refer to them in the future.
- 1|2|3 Business Current Account Key Facts Document (PDF - 1.09 MB)
- Business Current Account Key Facts Document (PDF - 1.05 MB)
- General Terms & Conditions including Terms of Business (PDF - 581 KB)
To view these documents, you may need to download Adobe Reader
If you opened a 1|2|3 Business Current Account or Business Current Account before 28 March 2019, or have a Business Everyday Current Account or CBILS Overdraft, please see your Key Facts Document
Account alerts
Unless you’ve opted out, you’re automatically set up to receive text alerts when:
- your account makes or may make use of an unarranged overdraft
- you have regular payments due on your account for which you have insufficient funds to cover, we will ask you to pay into your account to ensure these payments are made;
- where a payment is refused as you don’t have enough funds.
You can also register to receive an alert when:
- your account makes use of an arranged overdraft
What happens after I apply?
Our Business Overdraft is subject to status. If your application is approved, we'll send you a letter confirming the overdraft facility.
Reducing or removing your overdraft
We review and renew overdrafts annually. This means it will continue until either you tell us you no longer want it, or we give you notice that we're reducing it or removing it in full.
Please remember to check your current balance before applying to reduce or remove your overdraft. If you reduce or remove your overdraft, your account could enter an unarranged overdraft, or this could lead to payments being rejected. Staying in an unarranged overdraft could also affect your credit score in the long term.
Security
Keep your banking details private and secure.
For more information about our approach to security as well as more useful information to help you stop the threat of fraud visit our Security Centre
- Sign up for free text message alerts, to help you stay in touch with your account.
- Using online and mobile banking, to quickly check your account balances on the move.
- See our business current accounts, which may charge less for using an overdraft than you are currently paying. It's quick and easy to transfer to a different account.
- Borrowing money in different ways. Make sure that any borrowing you use is both affordable and suitable for your needs.
- Don’t go over your arranged overdraft limit.
- Stay up-to-date with any changes to your business current account or overdraft, including fees.
- Remember that anything you spend from your overdraft will need to be paid back.
If you’re worried or need help with reducing your overdraft, visit our overdraft support page.
If money is a bit of a struggle for you at the moment, you’re not alone. The last couple of years have been difficult, and we’re now seeing rises in the cost living and doing business. We’re here to help, and you can find more resources on our If business finances are a struggle page.
If your business is facing financial challenges and you end up spending more than your agreed overdraft limit, we have options to help you. Here’s a few examples of how we can support you in managing or reducing your overdraft during challenging times:
- Repayment plan – You can set up regular payments to repay your unarranged overdraft balance. We'll suspend your interest and fees during the time of the agreement. You won't be able to use your account until the excess has been cleared.
- Monthly reducing overdrafts – We offer a temporary limit to cover your unarranged overdraft balance. Over a period of time, this is reduced back to any arranged overdraft limit. This can help clear your arrears while you're still using the account.
- Breathing space – This gives you a period of time to contact a third party to develop a repayment plan, with any interest and fees suspended during this time.
- Paydown – If there’s no agreement on the best solution, contributions can be made towards the account. The account is blocked and can no longer be used.
These support options are tailored to your individual circumstances once we have conducted a budget planner with you. Any arrangements in place will impact your credit file.
For additional information on credit files, please take a look at this Breakthrough page. You'll find other helpful resources within this business support hub too.