A business’ working capital requirement is driven by the length of time between when suppliers need to be paid and when customers pay. As turnover grows, this requirement grows too and often requires financing.
One of the simplest ways to fund this is via an overdraft facility. The pre-agreed limit is added to a business account and the interest is calculated daily and payable on only the amount used. Short term loans can be used to cover a one-off expense e.g. VAT or tax, where the requirement will only be for a matter of months.
