Glossary
What do the technical terms mean
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Overdraft facility
If an account holder debits his account over and above the agreed credit line, then he has used an overdraft facility.
Overdraft facility
The overdraft facility can be divided into two categories. The overdraft facility for private customers and the overdraft facility for business customers. A private current account is managed as a current account within the meaning of ยง 355 HGB. This means that credit balances as well as debit balances are provided for. If there are no agreements on an overdraft facility, disposals must be covered by the bank balance. An overdraft facility is a consumer loan in which the lender grants the borrower the right to overdraw his account by an agreed amount.
Overdrafts
Overdrafts or working capital loans are used to bridge liquidity bottlenecks. In other words, the focus of expenditure is prior to the point in time at which income is received. Interim loans are granted when the final financing is secured but cannot yet be drawn down. In the case of advance financing, the company is granted an overdraft despite unsecured final financing.