Overdraft for small and medium sized businesses

Brief summary

A current account loan offers companies a flexible credit line to bridge short-term liquidity bottlenecks, with interest only accruing on the amount used. Qred offers a similar solution with flexible business loans that are easy to apply for and can be repaid at any time. This gives companies rapid liquidity without complicated processes or hidden costs.

Current account credit for small German businesses

This is a guide to current account loans. At Qred Bank, we don't currently offer overdrafts, but we do have one business loan, which works like a current account loan. Read more about our corporate loans.

What is a current account loan and how does it work?

A current account loan, also known as an overdraft or credit line, is a flexible form of financing that enables companies to bridge short-term liquidity bottlenecks. This involves providing an account with a fixed credit line, which the company can use as soon as it needs money. This credit line offers the company financial flexibility by withdrawing amounts that are then available under the current account framework.

With a current account loan, the company has the opportunity to quickly access additional funds without having to apply for a separate loan for each individual transaction. The repayment is made as soon as the company has sufficient funds and interest is only charged for the amount actually used.

The benefits of a credit line for companies

A credit line for companies is particularly useful when short-term liquidity gaps need to be closed. It is ideal for managing seasonal fluctuations or unexpected expenses without affecting the company's long-term financial planning. The advantage is that the company remains flexible and only pays interest when the credit line is used.

Companies that apply for a credit line can often activate it with little effort and use it as needed. It is therefore a type of safety net that is available at all times but does not incur any costs as long as it is not used.

How does the current account framework work?

The current account framework describes the amount of credit that the company may overdraw. This is set by the bank or lender and is usually based on the financial situation and creditworthiness of the company. Within this framework, the company can retrieve funds, which are then automatically credited to the business account.

If the credit line is used, interest must only be paid on the amount retrieved, not on the entire current account balance. This flexibility makes the current account loan particularly attractive for companies that have unforeseen expenses or need money in the short term to finance ongoing transactions.

How do you apply for a credit line?

Applying for a credit line is usually a simple process, but it can vary from bank to bank. Companies must generally disclose their financial situation, including balance sheets and credit statements. The lender checks this information and then decides on the amount of the current account limit. The better the company's financial situation, the higher the credit line can be.

It is important to know that the terms and interest rates for current account loans depend on various factors, such as the company's creditworthiness and general market conditions.

The definition of a credit line

The credit line definition is easy to summarize: It is a maximum loan amount that a bank makes available to a company. In contrast to a classic loan, which pays out a fixed sum once, a credit line allows the company to withdraw funds repeatedly as long as the maximum amount is not exceeded.

Companies often use credit lines to cover short-term financing needs without having to incur long-term liabilities.

Current account credit in English

Line of Credit, Credit Line, Overdraft, Check Credit

Why Qred does not offer a current account loan but has a comparable solution

Although Qred does not offer a traditional current account loan or credit lines in this form, we have an equally flexible and business-friendly solution. Our business loans work in a similar way to a credit line but offer additional benefits. With Qred, companies can borrow between €5,000 and €200,000, with the flexibility to repay the loan in full at any time.

This means that companies only pay for the period in which they actually need the loan. Just like with a current account loan, with Qred, you only pay interest on the amount used and can adjust the loan as you wish. This approach gives you the same financial flexibility as a credit line, but without complicated processes or hidden costs. Remember to always check the total cost of your loan by using a calculator.

The benefits of a business loan with Qred compared to a credit line

Compared to a traditional current account loan, a business loan with Qred offers a number of advantages:

1. Repayment flexibility: You have the option to repay the loan in full at any time without any additional fees.

2. Easy application: The credit application process is straightforward and can be completed online. This saves time and paperwork.

3. Quick decisions: With Qred, you get quick feedback on your loan, often within 24 hours.

4. Transparent terms: There are no hidden fees or complicated contract clauses. You know from the start what costs you will incur.

Which solution is right for your company?

A current account loan or credit line can be a useful solution for many companies to bridge financial bottlenecks and react flexibly to market conditions. However, you should always check your needs and the conditions of the respective offers.

At Qred, we're committed to providing entrepreneurs with an easy and quick way to secure their funding. Our business loans offer similar benefits as a credit line, but with greater flexibility and without the complex structures of a classic current account loan.

So if you're looking for a financing solution that offers you fast liquidity while being flexible and simple, a business credit Qred is just the thing for you.

Apply for your loan online and find out how Qred can help you successfully move your business forward.