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Credit Corp vs a business overdraft
A business overdraft and a Credit Corp loan solve different problems. An overdraft is flexible, ongoing and usually cheaper per pound if your bank offers you one — but it depends on an existing banking relationship, can be reviewed or withdrawn, and often needs security. This page sets the two side by side honestly.
Credit Corp vs a business overdraft
Being straight with you: if your bank already offers you an overdraft facility, it is usually the cheaper way to cover a flexible, ongoing gap. Credit Corp earns its place when you do not have an overdraft facility, your bank has declined or reduced one, or you need a fixed, dated amount fast without a full banking review.
At a glance
| What matters | Credit Corp | Business overdraft |
|---|---|---|
| Who it is for | UK limited companies and LLPs that need a small, fixed amount fast, with or without an existing bank facility. | Existing business banking customers the bank is willing to extend an overdraft facility to. |
| Typical amount | £50–£500 per advance. | Varies widely by bank and relationship — often a few thousand to tens of thousands. |
| Typical term | A fixed 14–84 days, then cleared. | Ongoing, revolving facility — technically repayable on demand by the bank. |
| Cost per pound | 0.25% per day simple interest, capped at 100% of principal. | Roughly 12–20% EAR variable is typical, e.g. NatWest's representative business overdraft rate is around 13.8% EAR. |
| Decision speed | Same-day decision in most cases. | Requires an existing account and bank review; can be quick for existing customers, slower to set up new. |
| Personal guarantee | No personal guarantee. We lend to the company. | Often required, especially for larger limits or newer business relationships. |
| Can it be withdrawn or reduced? | No — once agreed, the term and cost are fixed. | Yes — an overdraft is technically repayable on demand and the bank can reduce or withdraw the facility. |
| Ongoing relationship required | No — a one-off application each time you need it. | Yes — usually requires holding your main business account with that bank. |
Indicative cost per £100 borrowed, per 30 days
Indicative cost per £100 borrowed, per 30 days (illustrative — not a quote)
How each one is priced
| Option | How it is priced | Typical amount & term |
|---|---|---|
| Credit CorpSmall, short borrowing for UK limited companies and LLPs — no personal guarantee. | 0.25% interest per day · £5 one-off fee · total cost capped at 100% of the amount borrowedInterest only; the £5 fee is one-off. Repaying early reduces the total. | £50–£500 · 14–84 days |
| Business overdraftA representative UK business overdraft facility. | Roughly 12–20% EAR variable (e.g. NatWest representative ~13.8% EAR)Rate varies by bank, facility size and your existing relationship; unarranged or unauthorised overdraft use can cost significantly more. | Varies by bank · ongoing facility |
For a plain-English breakdown of what a business loan costs, and why, see the Help Centre.
When Business overdraft is the better choice
- You already hold a business account with a bank willing to offer you an overdraft.
- You need ongoing, flexible access to a facility rather than a one-off fixed amount.
- Lowest cost per pound matters more than speed or simplicity, and you can meet the bank's criteria.
- You are comfortable with a facility that is technically repayable or reducible on the bank's demand.
When Credit Corp fits better
- You do not have an overdraft facility, or your bank has declined or reduced one.
- You need a fixed, dated amount for a specific gap, not an ongoing revolving facility.
- You need a decision today, without a full banking relationship review.
- You will not give a personal guarantee, and want the debt to sit with the company alone.
How to read the comparison
- EAR (Effective Annual Rate) annualises an overdraft's variable daily cost; over a short period the actual cost is a fraction of the annualised figure.
- We normalise to "cost per £100 borrowed, per 30 days" so a small, short loan and an ongoing revolving facility can sit side by side; treat the figure as illustrative, not a quote.
- An overdraft's real-world cost depends heavily on how much of the facility you actually draw and for how long — the EAR is a ceiling reference, not a fixed bill.
- Always check your own bank's current overdraft rate and terms before deciding — they vary by provider and by your own facility.
Common questions
Is a Credit Corp loan cheaper than a business overdraft?
Usually no, if your bank already offers you an overdraft — per pound, an overdraft is normally the cheaper way to cover a flexible, ongoing gap. Credit Corp is the right fit when you do not have that facility available, or need a fixed amount fast without a bank review.
Why choose Credit Corp over an overdraft?
Speed and availability. You do not need an existing overdraft facility, a full banking review, or to bank with a specific provider — and we give a same-day decision with no personal guarantee.
Can my bank reduce or withdraw my overdraft without notice?
In principle, yes — most business overdrafts are technically repayable on demand, and banks can reduce or withdraw a facility, though in practice most give reasonable notice. A Credit Corp loan's term and cost are fixed once agreed and cannot be changed part-way through.
Do I need a personal guarantee for an overdraft like I might for other bank lending?
It depends on the bank and the size of the facility — smaller overdrafts for established relationships sometimes do not require one, but many do, particularly for newer businesses or larger limits. Credit Corp never takes a personal guarantee.
Sources
The overdraft rate is quoted from published bank information, accessed July 2026. Figures change — please verify with your own bank.
- Business overdraft: representative rates published by major UK banks for arranged business overdraft facilities, typically in the 12–20% EAR variable range depending on bank and facility size.
If a fixed, dated amount with a same-day decision and no personal guarantee fits better than an overdraft, see exactly what a Credit Corp loan would cost.
Apply for a business loan Calculate your cost
Prefer to read more first? How our business loans work, check your eligibility, or compare us with other lenders.
Credit Corp lends to UK limited companies and LLPs under the body-corporate exemption (Articles 60B and 60L of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001). This is not consumer lending. The Financial Ombudsman Service and Financial Services Compensation Scheme do not apply. Full details: regulatory status and responsible lending policy.