Business overdraft alternatives in Ireland: options for companies

An overdraft lets your company’s current account go below zero up to an agreed limit. You pay interest only on the overdrawn balance, usually calculated daily. Published terms from the three retail banks, checked on 22 October 2026:

• Bank of Ireland: overdrafts from €1,000, with online applications up to €500,000, on a 12-month facility at 8.05% variable. Its FAQs list an annual facility fee of €50 for overdrafts with a debit balance of €100 or more for 14 days or more. The account must return to credit for at least 30 days in each 12 months, or a higher rate can apply, although Bank of Ireland says it has not charged this surcharge since 23 August 2021, until further notice.
• PTSB: overdrafts from €1,000 at 8% variable, with a €25 facility fee charged when the overdraft is first used and each year after. For a limited company, PTSB may ask for a personal letter of guarantee.
• AIB: agrees a monthly overdraft limit based on your cash flow needs, at a variable rate, with security possibly required. AIB’s overdraft page does not publish a rate.

Repayable on demand and reviewed every year

This is the key point. Overdrafts are not term loans. AIB’s general terms for business lending say plainly that overdraft and credit line facilities are repayable on demand, and that the bank may review facilities and security on a set date and annually after that. Bank of Ireland’s terms also say the overdraft is repayable on demand and reviewed at the date in your letter of offer, with no obligation to continue it after that date.

In practice, banks rarely call in a well-run overdraft without warning. But a limit can be reduced or removed at review, often at the moment your company needs it most, such as after a weaker year or when the bank’s appetite for a sector changes.

• The overdraft has become permanent. If the account has been overdrawn most of the year, the company has a structural funding gap, not a timing gap.
• The limit is too small for the business as it has grown, and the bank will not increase it.
• The bank has reduced or withdrawn the limit at review, or has asked for a personal guaranteeA legally binding promise by a director or other individual to repay a company's debt if the company cannot. or security.
• The company wants certainty: a facility that cannot be called in at short notice.
• The cash gap is caused by something specific, such as slow-paying customers or stock bought months before it sells, which a specialist product can match more closely.

Revolving credit facility

A revolving credit facility works like an overdraft held in a separate account: you draw, repay and redraw up to a limit over an agreed term. It is usually committed for that term, which gives more certainty than an on-demand overdraft. Our revolving credit facility page explains how it works and who offers it.

Working capital loan

A working capital loan is a lump sum repaid in fixed instalments, usually over one to three years. It suits companies whose overdraft has become a permanent part of their funding. Moving the hard-core balance onto a loan gives a clear repayment plan and frees the overdraft for genuine short-term swings.

Short-term business loan

A short-term business loan runs for a few months to about a year. It suits a known, one-off need, such as a tax bill, a seasonal stock build or a large order, where you know when the money will come back in.

Invoice finance

If the overdraft exists because customers pay on 30, 60 or 90-day terms, invoice finance releases cash against those unpaid invoices. Bibby Financial Services Ireland, for example, quotes advances of typically up to 90% of invoice value within 24 hours; the lender decides, and timing is not guaranteed. The facility grows as your sales grow, unlike an overdraft limit. Our guide to factoring vs invoice discounting explains the two main types.

Merchant cash advance or revenue-based finance

Companies that take most of their income by card can use a merchant cash advance, repaid as a share of future card sales. 365 Finance, for example, says the share is typically 5% to 15% of card sales, for businesses trading over six months with card sales over €10,000 a month. Repayments fall when trade is quiet, but the cost is usually a fixed fee that can be expensive if repaid quickly.

Trade and supplier finance

If the overdraft is used to pay suppliers before goods are sold, trade finance or supplier-payment finance pays the supplier for you and gives your company time to repay. Treyd, for example, funds supplier invoices for physical goods with a payback period of one to five months, for companies with at least a year’s trading and annual revenue of at least €200,000. Linked Finance’s BillPay product, from €10,000, runs for up to nine months.

Business credit card

A business credit card can cover small, regular expenses such as subscriptions, travel and online purchases, with an interest-free period if the balance is cleared in full each month. Limits are usually modest and rates on unpaid balances are high, so it is a tool for convenience rather than a funding solution.

• Bank overdraft: flexible, interest only on what you use, low published rates; repayable on demand and reviewed yearly.
• Revolving credit facility: flexible drawing like an overdraft, usually committed for a set term; may carry commitment or arrangement feesA one-off fee for setting up a loan or facility, charged by the lender or a broker, either paid upfront or deducted from the funds advanced..
• Working capitalThe money a business has available to fund day-to-day operations, calculated as current assets, such as cash, stock and debtors, minus current liabilities, such as suppliers and short-term debt. loan: fixed repayments over one to three years; certainty, but you pay interest on the full amount from day one.
• Short-term loan: a few months to a year for a specific need; quick to arrange with some lenders, usually higher cost.
• Invoice finance: grows with your sales ledger; only suits companies invoicing other businesses, and has service and discount chargesThe interest-like charge in an invoice finance facility, calculated on the money advanced for the days it is outstanding..
• Merchant cash advance: repayments flex with card sales; fixed cost that can be high in annual terms.
• Trade or supplier finance: matched to specific supplier invoices; short terms and fees per invoice.
• Business credit card: convenient for small spend; high rates if not cleared each month.

Start by looking at your last 12 months of bank statements. The pattern of your overdraft usage tells you which product fits.

1. If the account swings in and out of credit each month, the overdraft is doing its job. Keep it, and consider a back-up such as a revolving facility in case the limit is cut.
2. If the account has not been in credit for months, move the hard-core balance onto a working capital loan with fixed repayments.
3. If the gap is caused by debtor days, look at invoice financeAn umbrella term for funding secured on a company's unpaid invoices, so cash comes in before customers pay..
4. If the gap comes from paying suppliers or buying stock in advance, look at trade or stock financeFunding used to buy stock or inventory, where the lender pays suppliers or advances against stock held and the company repays as goods are sold..
5. If your income is mostly card sales and seasonal, consider whether a merchant cash advance’s flexible repayments are worth its cost.
6. Compare the total cost of each option over the same period, including fees.

If a regulated lender reduces or withdraws your facility, ask for its reasons in writing. The Central Bank’s SME Lending Regulations require regulated lenders to give written reasons when credit is declined, and give micro and small enterprises the right to appeal. Our guide on what to do if a bank refuses a business loan covers your options, including the Credit Review Service. If the pressure comes from a tax bill, ask Revenue whether a phased payment arrangementAn agreement with Revenue to clear overdue tax in instalments rather than in one lump sum. is possible before you borrow to pay it.

Often, yes. A small overdraft is still a cheap and convenient buffer for day-to-day swings, and the annual facility fees published by Bank of Ireland and PTSB are low. Many companies use a term or working capital loan for the long-term part of their funding and keep a modest overdraft for genuine short-term needs. The aim is to make sure the business would still have enough cash if the overdraft limit were reduced at its next review. Tell any new lender about your overdraft, and tell your bank about any new facility, so neither is surprised at review.

If your trading limited company needs a working capital loan, a short-term business loan, a merchant cash advance, revenue-based finance, or stock or trade finance to sit alongside or replace an overdraft, our panel may be able to help. For anything else, tell us what your company needs and we’ll tell you honestly whether our panel can help, or where to apply instead. Welcome Finance is a commercial finance broker, not a lender, and is not regulated by the Central Bank of IrelandIreland's financial regulator and part of the Eurosystem.. We work only with companies registered in Ireland (LTD, DAC, PLC or ULC). We are paid commission by lenders and do not charge your company a fee. We never ask for payment upfront.