Business account overdraft request - Amount?

[hansello]

Hi. I'm looking to request an increase of my overdraft on my business account, and i was wondering if anyone could advise of what I could realistically expect as a % of my annual gross turnover. My account is healthy and I have never used the overdraft I have. Ideally I'm looking for as large an overdraft as I can in preparation for some upcoming refurbishment (as a back-up to the near impossible business loan application). many thanks.

[anniebird]

You need to calculate the amount you will need for the refurbishment and any associated costs. Then you need to produce a cash flow forecast to show how you will repay the amount. Once you have done this you will know what to ask for and will be able to show the bank that you can repay it. The bank will not automatically increase your overdraft especially as you are not using the overdraft you currently have. Remember that normally a bank loan has a lower interest rate than an overdraft.

[boxtops]

I agree with anniebird - the bank will want to see some business forecast, and to know what you intend to use the money for.

[kinell]

i would be very surprised if a bank would assess your suitability for an overdraft on gross turnover figures......

that old saying.....'turnover is vanity but profit is sanity'...

i bet jane norman, t j hughes and the many other 'high street names' had very nice looking turnover figures....