An overdraft and a revolving credit facility both let you draw and repay funds repeatedly, but they are not the same product. Understanding the difference helps your company choose the right tool for the job.
Commitment and stability
A bank overdraft is typically an uncommitted facility — the bank can reduce or remove it at any point, including at renewal or if your account behaviour changes. Creditcorp Flex gives your company a confirmed credit limit it can draw against, repay, and redraw for the term of the facility, providing more planning certainty.
How costs work
Overdrafts usually charge a daily usage fee plus an arrangement fee, and the all-in cost can be opaque. With Creditcorp Flex, you pay only when you draw: the cost is applied to the drawn balance, so a zero drawn balance costs nothing. There are no charges for having the facility available.
No personal guarantee and no current-account dependency
A bank overdraft is tied to your business current account with that bank. Creditcorp Flex is a standalone facility — you do not need to switch your banking, and there is no cross-default clause linking it to your day-to-day account. Critically, there is no director personal guarantee: the facility is with the company.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Creditcorp vs a bank business loan, How Creditcorp Flex works.