A business overdraft is a line of credit that becomes available when you make any withdrawal for an amount greater than the balance in your business debit account.

This means you can continue making withdrawals even if the account is empty, giving you flexibility in your cash flow. It can enable you to pay your employees on time no matter whether or not your clients have paid you on time, and it can be helpful for businesses with a large number of seasonal workers or businesses that need to invest in new equipment.

What you spend must be repaid, of course, just like a credit card or a business loan. Interest is charged on the business overdraft based on the amount of credit you used.