Overdraft facility

[Andy27UK]

Hey, all

The business is approaching the end of year 3 now and we're considering an overdraft facility to step up the sales turn over for year 4.

HSBC offer and overdraft at 7% above the base rate (so 7.5%) which seems a good rate but then this is all new to me. I understand intrest is calculated daily and charged monthly?

So lets take the worst case scenario - we are over drawn for 30 days by exactly £5,000, how do i calculate the intrest on this?

Thanks in advance

 

[Zahidparvez]

=5000X.075=375 over a year
375/365*30=30.82 Roughly

 

[Mattonella Tile Studio]

Very crudely you would work out 7.5% of your 5k. Divide it by 365 for your daily charge, multiply by 30. £30.82

 

[Andy27UK]

Thats great, thanks for your help guys. I thought it was something fairly simple along those lines :redface:

So at a pound a day intrest it seems a good idea all the time the base rates so low