About our business overdraft
An arranged business overdraft is borrowing through your business current account. This acts like a short-term safety net when your business cashflow needs a little extra support. You pay an annual fee, and interest on what you use. This can be expensive compared to other borrowing options.
Business overdrafts from £500 - £25,000 (subject to status)
An overdraft is flexible - you only borrow what you need at the time
Different business current accounts may have different overdraft interest and charges
If you need a quick cash flow boost or when an expected cost comes along
What you need to apply
You’re an existing Santander Business Current Account holder
Your business is based and registered in the UK
You’re either a sole trader, partnership, limited liability partnership or private limited company with no more than 2 partners or directors, who own the business entirely
You haven’t been a disqualified director or a director of a failed business within the last 6 years
You have a good credit history and haven’t been declared bankrupt
The company, directors, owners or partners have not had an Individual Voluntary Arrangement in the last 6 years.
Other things to consider
- When you apply for an arranged business overdraft with us, we’ll look at your circumstances. We’ll then let you know if you can have one, and how much you can borrow. You must repay any overdraft when we ask you to in line with our General Terms and Conditions.
- If you’re a limited company or limited liability partnership, we’ll ask for a director's personal guarantee as part of our agreement with you.
- We charge an annual arrangement fee of 1.75% (minimum £100) for an arranged overdraft. This’ll be taken when your overdraft is applied to your account and on renewal each year, if applicable.
Representative example
The below example is based on the Business Current Account Classic and is subject to status.
If you use an arranged overdraft of £1,000, you’ll be charged an interest rate of 14.94% EAR (variable) and an annual arrangement fee of 1.75% (minimum £100). Actual credit limit may differ.
This means if you have an overdraft of £1,000 and use it in full for 7 days you`ll be charged £2.69 as well as the annual arrangement fee of £100.
If you have an overdraft of £1,000 but don't use it, you’ll still be charged the annual arrangement fee.
To apply for an overdraft, call to speak with a member of our business banking team.
To apply you'll need to provide the following:
- What your business turnover was for the last 12 months
- What business costs you have had to pay in the last 12 months, like rent or mortgage payments
- Your expected business turnover in the next 12 months
- Your total debt repayments each year. This includes how much you repay towards any loans or other borrowing
- How much money you take from the business for personal use, like salary.
Understanding our business overdrafts
Borrowing through your existing business current account with us
Short term safety net for when your business cash flow needs a little extra support
Easy to understand annual arrangement fee
Only pay interest on what you use
Different business current accounts may have different overdraft interest and charges
You must repay any overdraft when we ask you to in line with our General Terms and Conditions
When you apply for an arranged business overdraft with us, we’ll look at your circumstances. We’ll then let you know if you can have one, and how much you can borrow. You must repay any overdraft when we ask you to in line with our General Terms and Conditions.
It's important to remember that different business current accounts may have different overdraft interest and charges.
You’ll incur debt when you use your arranged or unarranged overdraft. As with any other debt, managing an overdraft and keeping costs under control is important.
Depending on your circumstances, there may be alternative forms of borrowing, such as our Business cashback credit card, if you want to find out more, please review our full list of borrowing options
It can be expensive to use an overdraft for the long term as the interest can mount up.
Advantages and disadvantages of using an overdraft
An overdraft is flexible – you can borrow what you need, when you need it
It's quick to arrange
No early repayment charge
Interest charges - The interest charged on overdrafts can be high, which makes it an expensive way to borrow long-term.
Over-spending - Spending is coming out of your business current account, so keep an eye on your debit card to avoid a large overdraft. The overdraft could be hard to pay off. We'll send text alerts if you're close to your overdraft limit unless you have opted out.
The bank has the right to ask for repayment of your overdraft at any time.
Arranged and unarranged business overdrafts – how they work
Here’s an example of how it works for a customer with a £1,000 arranged overdraft (your specific fees may vary).
In credit
| This is when your balance is over zero and you have money in your account that is available to spend.
|
Arranged overdraft | This is when your balance is below zero but within your arranged limit. You must agree the limit with us before it's available to use. (If you don’t have an arranged overdraft, you will go straight into your unarranged overdraft). |
Unarranged overdraft | This is when a transaction that you’ve made, or fees that have debited from your account, that have taken you beyond your arranged overdraft limit or below zero without an arranged overdraft in place. |
Regular use of an unarranged overdraft could have an impact your credit file.
There are fees associated with overdrafts on the Business Current Account – Classic.
| Business Current Account – Classic Interest and charges | |
|---|---|
| Arranged overdraft annual fee | 1.75% of agreed overdraft (minimum fee £100) |
| Arranged overdraft interest rate | 14.94% EAR (variable) |
| Unarranged overdraft interest rate | 14.94% EAR (variable) |
| Unpaid item fee | No fee |
| Paid item fee | No fee |
If you have an account that is no longer on sale, please review the Key Facts Documents for off-sale products.
The arranged overdraft annual fee is based on an agreed overdraft limit for 12 months and is payable annually if you renew your arranged overdraft. We’ll contact you before the expiry of this 12 month period (known as the renewal period) with your options for renewal.
If we agree to give you a higher overdraft limit outside of the renewal period, you'll have to pay another arranged overdraft annual fee and your 12 months will re-set from the date your higher overdraft limit is applied.
If you reduce your overdraft limit outside of the renewal period, there will be no refund on your arranged overdraft annual fee.
To help you understand the cost of an overdraft in pounds and pence, we've created a table with an example. It shows how much the cost of borrowing £1,000 through an arranged business overdraft costs. If you borrow more than this or for a longer period, the cost will be equal to or higher.
These figures relate to arranged overdraft interest costs. You’ll need to consider the annual arrangement fee of the agreed overdraft limit which is not included in the table below.
Cost of borrowing £1,000 through an overdraft | For 7 days | For 30 days | For 60 days |
|---|---|---|---|
| Business Current Account - Classic | £2.69 | £11.52 | £18.84 |
These illustrations assume you’re £1,000 into an arranged overdraft from the first day of the period of illustration. It assumes you don’t make any withdrawals or deposits. Your statement period starts on the first day of the period of illustration in a 30 day month.
If you have an arranged overdraft with us, we’ll normally charge you an arranged overdraft interest rate for each day you use it.
If you incur charges, we'll let you know on your monthly billing statement. These will include details of the transaction(s) that caused the fees and the date they'll be taken from your account.
We won’t charge you a fee if we refuse a payment due to a lack of funds. However, interest may apply if the account is in an arranged overdraft or unarranged overdraft position.
An unarranged overdraft is when your account:
- goes over your arranged overdraft limit, or
- has a balance below zero without an arranged overdraft in place.
You’ll be charged an unarranged overdraft interest rate on the amount you’ve gone over your arranged overdraft limit, or on the amount you’ve gone overdrawn without an arranged overdraft in place. Arranged overdraft interest will still apply to the portion of your balance within your limit (if any).
We charge an annual arrangement fee of 1.75% (minimum £100) for an arranged overdraft. This’ll be taken when your overdraft is applied to your account and on renewal each year, if applicable.
All overdrafts are subject to status. We can change your arranged overdraft limit at any time. We may require you to repay the amount you owe in full on demand at any time.
Everything you need to know before you apply
The documents below have important overdraft information, so we recommend reading them before you apply. You should save or print them so you can refer to them in the future.
- Business Current Account – Classic Key Facts Document (PDF - 185 KB)
- Banking and Savings General Terms & Conditions (PDF - 866 KB)
To view these documents, you may need to download Adobe Reader
If you have an account that is no longer on sale, please review the Key Facts Documents for off-sale product
If you’re a limited company or limited liability partnership, we’ll ask you to provide a director's personal guarantee as part of our agreement with you.
If your business structure changes over time we’ll ask any new directors to provide a director’s personal guarantees, if you still have a business overdraft.
Account alerts
We'll send you free alerts when:
- you make a payment that may take your account into an unarranged overdraft
- you make a payment that may take your account into an arranged overdraft
- we intend to refuse a future payment due to a lack of funds
- we refuse a payment due to lack of funds.
We’ll send these alerts before your account's charged so you have time to pay in money to avoid or reduce these charges. We’ll send these alerts by text, push notification, and/or email, so it’s important you tell us if your mobile number or email address changes.
You'll be automatically registered for these alerts. You can manage your alerts settings at any time by using Online Banking. For more information, visit our account alerts page.
Need more help? Please contact us
What happens after I apply?
Our Business Overdraft is subject to status. If your application is approved, we'll send you a letter confirming the overdraft facility.
Reducing or removing your overdraft
We review and renew overdrafts annually. This means it will continue until either you tell us you no longer want it, or we give you notice that we're reducing it or removing it in full.
Please remember to check your current balance before applying to reduce or remove your overdraft. If you reduce or remove your overdraft, your account could enter an unarranged overdraft, or this could lead to payments being rejected. Staying in an unarranged overdraft could also affect your credit score in the long term.
Security
Keep your banking details private and secure.
For more information about our approach to security as well as more useful information to help you stop the threat of fraud visit our Security Centre
If you are thinking about changing your business overdraft, please remember to check your current balance before applying to reduce or remove your overdraft.
If you decide to do this and your account is using its arranged overdraft, removing or reducing your arranged overdraft could put your account in an unarranged position. This could lead to refused and rejected payments and bills.
Staying in an unarranged overdraft could also affect your credit score in the long term.
- Sign up for free alerts, to help you stay in touch with your account.
- Using Mobile and Online Banking, to quickly check your balances on the move.
- See our business current accounts, which may charge less for using an overdraft than you are currently paying. It's quick and easy to transfer to a different account.
- Borrowing money in different ways. Make sure that any borrowing you use is both affordable and suitable for your needs.
- Don’t go over your arranged overdraft limit.
- Stay up-to-date with any changes to your business current account or overdraft, including fees.
- Remember that anything you spend from your overdraft will need to be paid back.
If you’re worried or need help with reducing your overdraft, visit our overdraft support page
If money is a bit of a struggle for you at the moment, you’re not alone. The last couple of years have been difficult, and we’re now seeing rises in the cost of living and doing business. We’re here to help, and you can find more resources on our If business finances are a struggle page
If your business is facing financial challenges and you end up spending more than your agreed overdraft limit, we have options to help you. Speak to our financial support team who can discuss the options available. These may include:
- Repayment plan – You can set up regular payments to repay your unarranged overdraft balance. We'll suspend your interest and fees during the time of the agreement. You won't be able to use your account until the excess has been cleared.
- Monthly reducing overdrafts – We offer a temporary limit to cover your unarranged overdraft balance. Over a period of time, this is reduced back to any arranged overdraft limit. This can help clear your arrears while you're still using the account.
- Breathing space – This gives you a period of time to contact a third party to develop a repayment plan, with any interest and fees suspended during this time.
- Paydown – If there’s no agreement on the best solution, contributions can be made towards the account. The account is blocked and can no longer be used.
These support options are tailored to your individual circumstances once we have conducted a budget planner with you. Any arrangements in place will impact your credit file.
For additional information on credit files, please take a look at this Building your business page. You'll find other helpful resources within this business support hub too.
Business Banking Awards
Information correct as at 9 July 2025.