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Better cash-flow management with a business overdraft

Small businesses are the engine room of the Australian economy, but two years on from the start of COVID-19, they continue to battle its lagging impact on trading conditions.

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Labour shortages that followed Australia’s border closures are leaving many businesses understaffed. At the same time, rising inflation and supply chain issues have made inventory expensive and difficult to source.

The Shift Business Index, which tracks the financial health of Australian businesses, shows wage and supplier costs continue to rise. In April alone, business owners directed an average 54% of their incoming cash to supplier costs.[1] The Council of Small Business Organisations of Australia (COSBOA) says a third of businesses are struggling to pay rising energy bills.[2]

Cash flow is a constant issue for small businesses

One of the biggest issues small business owners face is cash flow. The combination of inventory outlays and creditors failing to pay invoices on time can put a squeeze on available funds. Some business owners resort to dipping into their personal finances to cover the gap.

This is where a business overdraft facility can carry a business through a time of shortfall. Businesses can use the overdraft to pay for urgent inventory or cover a utility bill until invoices are paid and cash flow is back to normal.

Limitations of a bank overdraft facility

Traditionally, businesses have looked to their banks for a line of credit because the bank hosts their business transaction account. But banks are increasingly seen as out of touch with the needs of small businesses.

Research shows that more than a third of small business owners are considering alternative lenders who can provide funds in a reasonable timeframe and are more attuned to their needs.[3]

Bank credit requirements can also be onerous – many small business owners are loath to put up their private homes or business property as security. Extensive paperwork, a protracted approval process, and annual reviews are further reasons why business owners look for a bank alternative.

Introducing Shift Business Overdraft

Shift Business Overdraft is a bank-less overdraft facility that small to medium businesses can use to cover gaps in their cash flow.

The overdraft is a revolving credit facility, from $10,000 to $1 million, that links to your business transaction account.
You only pay interest on the funds you use. An 11.95% to 19.95% variable annual rate applies, depending on your business turnover.
There's an annual fee of $495 or $795 depending on the account limit.

Why choose a Shift Business Overdraft?

The overdraft facility is easy to set up and use and was designed specifically to meet the needs of small to medium businesses.

Business owners can open an account within minutes – there’s no lengthy or complicated application process and wait times.
The credit limit is specific to the business based on real-time credit assessments.
The overdraft links to an existing bank account, giving you choice and control of your money.
Property is not required as security.
You can make extra repayments or pay out the overdraft whenever you want, at no cost.

How does it work?

When a business registers with Shift, you’re asked to connect your business bank account. That allows Shift to categorise the business’s weekly incomings and outgoings.

Lending is based on an assessment of your business cash flow.

Shift Business Overdraft is already used by thousands of operators in the construction, retail, and warehousing industries who find it an easy and flexible cash-flow solution for their business.