The quiet hero of cashflow: why an overdraft might be your practice’s best back-up plan
When the bills don’t wait but the payments do, an overdraft facility can be a real sanity-saver. Think of it as a financial safety net that’s always there when you need it, and invisible when you don’t.
An overdraft is a pre-approved line of credit linked to your business account. You can draw on it whenever you need a cashflow boost for things like consumables, payroll or tax. You only pay interest on what you actually use. No drawdown means no interest.
At a time when costs are climbing, reimbursements are slow and everyone is trying to keep cashflow healthy, having flexible options like this can take the edge off financial stress.
And it’s not just for established practice owners. Even junior doctors, dentists and vets can benefit from an overdraft facility when juggling expenses like course fees, relocation costs or professional registrations. It really is the chameleon of cashflow solutions, adapting to whatever you need it for, whether that’s education, working capital or short-term breathing space.
"For many of our clients, an overdraft isn’t about spending more. It’s about breathing easier. It gives you the freedom to manage short-term gaps without dipping into long-term savings." - Karan Tyrrell, Medical Finance Specialist
Why medical, dental and veterinarian professionals love overdrafts
- Flexibility that fits your flow
Your overdraft limit can be tailored to your cashflow needs. Use a little, use a lot, or not at all. When your account is in the clear, there's no interest to pay. -
Keep your home off the hook
One of the biggest benefits of an unsecured overdraft is that you don't need to put your house on the line. Your practice stays independent, your personal assets stay protected, and your financial life stays separate. -
Easy, deductible and low-cost
Interest on business-related overdrafts is generally tax deductible, which can make it a cost-effective way to handle one-off costs or everyday spending. Always chat with your accountant to confirm what applies in your situation. - No hidden extras
Some lenders charge monthly or annual fees even when an overdraft isn't being used. Those small amounts can add up fast. A no-fee facility that simply sits in the background until you need it can be a much smarter setup. - Peace of mind in a pinch
Whether you're heading on leave, covering a tax bill or facing an unexpected expense, knowing you've got a ready-to-go buffer can make all the difference.
When an overdraft facility makes sense
Overdrafts work best when they're used as revolving facilities. Draw funds when cashflow is tight and repay when things improve. Like a credit card, but designed for your business.
As with any finance product, everyone's situation is different. It's important to review the terms, fees and repayment structure to make sure it aligns with your goals and obligations.
It's also worth chatting to your specialist lender about the right setup, limit and timing, particularly if you have other loans or finance goals on the horizon.
At Credabl, we'll help you find a facility that flexes with your needs, not against them.
Ready to make cashflow a little less stressful? Let's talk. You can chat live at credabl.com.au or call us on 1300 27 33 22.
