WHERE LOCAL BUSINESS GROWS

Overdrafts



Overview
 

An overdraft is a sum of money extended to you as credit by your bank, set at a pre-arranged limit when your account balance drops below zero.

Banks usually charge interest on any amount of overdraft you use, but the terms and price of overdrafts will vary between providers.

You can use a bank overdraft to manage your cashflow, but it's probably not suitable if you’re looking for long-term funding.

The process
 

Getting an overdraft is similar to applying for a loan from your bank. Most lenders require you to:

  • share the financial risk by providing capital up to the same amount as you want to borrow, demonstrating your commitment and providing a contingency for repayment if things go wrong
  • provide security for borrowing requests - eg personal or business assets, such as your home or business premises
  • provide personal guarantees if you run a limited company, and the business cannot offer adequate security
  • keep them informed of your progress, particularly changes or problems
  • have a comprehensive business plan and cashflow forecast for larger borrowing requests
  • have a good credit record, including a good payment record with other creditors
If you’re looking for an overdraft, the bank will be especially keen to see that you make responsible use of it and don’t exceed the limit.

Pros and cons
 

Pros

  • An overdraft is flexible - you only borrow what you need at the time, which may make it cheaper than a loan
  • It's quick to arrange
  • Banks don’t normally charge you for paying off the overdraft earlier than expected
Cons
  • If you have to extend your overdraft, you usually have to pay an arrangement fee
  • Your bank could charge you if you exceed your overdraft limit without authorisation
  • The bank has the right to ask for repayment of your overdraft amount at any time, although this is unlikely to happen unless you get into financial difficulties
  • Overdrafts may be secured against business assets
  • Unlike loans, you can only get an overdraft from the bank where you maintain your current account. In order to get an overdraft elsewhere, you need to transfer your business bank account
  • The interest rate applied is nearly always variable, making it difficult to accurately calculate your borrowing costs
  • If you don’t use your overdraft, it may be reduced by the banks at short notice. This is unlikely to happen unless you get into financial difficulties

Common mistakes
 

You probably shouldn't use an overdraft if you need long-term funding – it is likely to be more expensive than taking out a loan. Your bank may turn you down if you can’t:

  • explain why you want the overdraft and how you will use it
  • demonstrate that you understand the risks and that you have taken steps to reduce their effect
  • explain who looks after your business’ finance and that you have solid financial systems in place
  • provide financial data, eg accounts, budgets and forecasts

Funding sources
 

Banks are the main source of small business overdrafts. The Better Business Finance website offers a business account finder service.

You can also consider finance from a non-bank lender. For more information, see our guide on non-bank lenders.

Appeals
 

You can launch an appeal if you've been been turned down by a bank for an overdraft, but it's possible this won't make a difference. For example, you may have been turned down because your business plan wasn't convincing, or because of your credit history.

You can start your appeal on the Better Business Finance website.

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Yorkshire businesses get behind £10k fundraising campaign

Tuesday 04 April 2017

As preparations for the charity football initiative ‘The Match 2017’ continue to gain momentum, the latest supporters to get on board are Huddersfield-based businesses Magic Rock Brewing and Lindley Financial Management. The inaugural event, which will take place on Saturday 20th May at The MBI Shay Stadium in Halifax, will bring together footballing amateurs and Huddersfield Town legends, in a game that will help to raise much needed funds for Yorkshire Air Ambulance. Both firms have dug deep for the cause, and have each donated £500 in return for becoming an official shirt sponsor. With a running cost of £12,000 per day for the two yellow helicopters to remain active, the organisation relies entirely on donations to continue saving lives. And now further support is required to keep The Match proceeds growing, and help this initiative reach its £10,000 target. Magic Rock Brewing was founded by brothers Richard and Jonny Burhouse and inspired by brewing traditions and the US craft beer scene in particular. The award-winning and ever-growing company produces an innovative range of idiosyncratic beers in their 4,000sqft Tap Room, close to the town centre. When approached via social media and asked to get behind The Match, Richard says there was never any doubt about getting involved: “We are a community focused business, keen to support local initiatives wherever possible. We are aware of the excellent work the air ambulance does for the region, and wanted to do our bit.” Regular charity supporters Lindley Financial Management also had no qualms about signing up to help the event. The independent financial advisers, based in Brighouse, also support Pilgrim Bandits Charity, aiding soldier amputees injured in Iraq and Afghanistan. Commenting on The Match, director Mark Learmont, said: “I hope as many people as possible attend on May 20th. Nobody knows when they may need the help of the Yorkshire Air Ambulance – supporting them is vital and their services must be applauded.” Organiser, and founder of grassroots football specialists Coaches Club, Dave Learmont, adds: “I am so thankful that two local businesses have gone the extra mile to raise awareness and proceeds for this fantastic charity. 100% of all funds donated will go to Yorkshire Air Ambulance, and these shirt sponsorships put us well on our way to hitting our huge target.” But the search for sponsors isn’t over, with the players themselves now looking for individual support. For only £150, companies will secure their name and details on the official match website, alongside their logo on the programme. The players and Town legends are also appealing for members of the public to get on board and buy tickets. Available at £10 for adults and £5 for children, the aim is to provide a fun, low cost day out for all the family. Pre-match and half-time entertainment – as well as a couple of extra special guests – will be revealed over the coming weeks. All tickets must be purchased before the game, via justgiving.com/teams/coaches-club. Further information and updates about The Match and player sponsorship can be found at The Coaches Club website, and on Twitter @cccmatch.
Posted by Scriba PR
Vizulate becomes Approved Supplier on Digital Enterprise scheme

Friday 10 March 2017

Vizulate Digital is delighted to announce that we have been named as an approved supplier on the Leeds City Region Digital Enterprise scheme, which allows eligible small and medium sized businesses across Yorkshire to ‘Invest in Digital’. Running until March 2019, the Digital Enterprise scheme aims to support the growth and development of SMEs in the region through investment in digital skills and technology. Eligible businesses will be able to apply for 40% funding towards the cost of digital projects including digital marketing, social media, web design and development, e-commerce and more – up to a maximum of £5,000. The Digital Growth Vouchers could also fund part of the cost of technology upgrades such as IT and telecoms and, if approved, the business will then only have to cover the remaining 60% of the cost. The Digital Enterprise scheme is a partnership programme which is partly funded by the European Union (European Regional Development Fund), the West Yorkshire Combined Authority/Leeds city region Local Enterprise Partnership (LEP) and the 9 local authorities which form part of the Leeds city region – Leeds, Calderdale, Kirklees, Bradford, Selby, Craven, Harrogate, York and Wakefield. As approved suppliers on the Digital Enterprise scheme with over 10 years’ experience we are able to offer the full range of digital services including: Website Design & Development E-Commerce Digital Marketing Social Media Search Engine Optimisation (SEO) Online Advertising (Google AdWords, Facebook Ads etc.) Video & Animation Integrated Digital Solutions Web Hosting & Email Through our trusted partners we can also provide IT and telecoms solutions. We believe digital marketing represents the single biggest opportunity for businesses to achieve growth.
Posted by Vizulate Digital
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Events Posted

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Facebook Advertising Workshop
Thursday 27 April 2017, 09:30 - 12:30
Bridge House, 2 Woodhead Road, Holmfirth, HD9 6PX
£65 - 6 places
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Business Hub Live - Innovation and Research & Development
Wednesday 24 May 2017, 08:30 - 10:30
Firth Street, Huddersfield, HD1 3BD
Free Entry - 50 places
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