Description Examples of uses Advantages Disadvantages Overdraft A form of loan from the Helps overcome cash-flow Easily arranged - can get an Interest is charged on the bank problems overdraft limit added to your amount borrowed account within minutes of it Allows you to take more Can be used to pay Daily interest rate is being agreed money out of your current suppliers charged for every day you account than you have Flexible - can change borrow amounts and deadlines Has to be agreed with your Interest rates can be quite bank high Maximum figure is set – as the overdraft limit Bank loan A sum of money is Purchasing a new of Interest rate charge is fixed Interest for small to borrowed equipment medium-sized businesses Fixed amount to be paid can be higher than the Paid back over a period Purchasing a new company monthly normal rate of interest of time van Fairly easy to obtain if you can meet criteria
Description Examples of uses Advantages Disadvantages Overdraft A form of loan from the bank Allows you to take more money out of your current account than you have Has to be agreed with your bank Maximum figure is set – as the overdraft limit Helps overcome cash-flow problems Can be used to pay suppliers Easily arranged - can get an overdraft limit added to your account within minutes of it being agreed Flexible - can change amounts and deadlines Interest is charged on the amount borrowed Daily interest rate is charged for every day you borrow Interest rates can be quite high Bank loan A sum of money is borrowed Paid back over a period of time Purchasing a new of equipment Purchasing a new company van Interest rate charge is fixed Fixed amount to be paid monthly Fairly easy to obtain if you can meet criteria Interest for small to medium-sized businesses can be higher than the normal rate of interest
Outcome-2-core-notes-nat-5-PF.docx