Overdraft
Quick Answer
What is Overdraft?
An overdraft is a revolving credit line on a business bank account for short-term cash gaps.
Overdraft explained
You pay interest only on what you use, but the bank can call it in. Overdrafts bridge timing; they are dangerous funding long-term assets.
Who it applies to: Businesses with lumpy cash cycles.
Cost: Interest on the used balance plus facility fees.
Related terms and guides
Official source: Gov.za
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Last reviewed: September 2026 by the BizAnswers editorial team. How we write and check our guides.