Overdrafts for SMEs reined in as many admit to exceeding agreed limits

Most business would fold in less than three months without an overdraft despite the facility being reined in, ABN AMRO Commercial Finance says.

Findings from its study reveal that 71 per cent of small and medium sized businesses SMEs have seen overdraft limits reduced by finance providers, while 86 per cent have seen overdraft fees rise.

However, the statistics also show that 48 per cent rely heavily on the finance option to keep the business operating.   Some 89 per cent of respondents admit that their business would only last for three months if access to an overdraft were removed.

The survey profiled the opinions of 250 SME owners, managers and financial controllers and finds that overdrafts are used to cover cash flow gaps and unexpected gaps.

via Overdrafts for SMEs reined in as many admit to exceeding agreed limits.