Bank Overdraft vs Bank Loan

Question 1

What are the 3 advantages of a bank overdraft?

Answer 1

• Easy to arrange
• Flexible (cash flow)
• Not secured on assets of business

Question 2

What are the 3 disadvantages of Bank overdraft?

Answer 2

• Can be withdrawn at short notice
• Interest charge varies which chsdnges in interest rate
• HIGHER I. R than bank loan