Rescuing a Business from Overdraft Mismanagement – A Smart Financial Move

Our Solution: A Strategic Overdraft Restructuring Plan

To rescue the business from financial distress, we implemented a three step approach:

Converting the Overdraft into a Cash Credit Loan

• We analyzed the client’s financials and proposed a cash credit facility instead of an OD.
• This shift helped reduce interest rates significantly and provided a structured repayment plan.
• Unlike an OD, a cash credit loan allowed the client to borrow at lower rates with defined repayment terms.

Negotiating Better Terms with the Bank

• We worked with the client’s bank to lower the interest rate from 14% to 10.5%.
• Arranged for longer repayment tenure, reducing monthly financial stress.
• Secured interest-only payments for the first 3 months to stabilize cash flow.

Implementing a Smart Cash Flow & Debt Management Plan

• Helped the client create a cash flow tracking system to avoid excess withdrawals.
• Educated them on structured repayment planning to reduce future financial risks.
• Introduced a working capital budget to ensure funds were used efficiently.