Study Notes

Sources of Finance - Bank Overdrafts and Bank Loans

Last updated 22 Mar 2021

Bank overdrafts and bank loans are two common and popular sources of finance for businesses.

Banks are the traditional "port of call" for businesses with cash flow problems. However, the banking crisis and related economic downturn between 2007 and 2012 made many banks more nervous about lending to businesses.

Assuming that bank finance is available, which one should a business go for?

Here is a summary of the key considerations:

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