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1. Facility.

An overdraft facility is a line of credit which is applied to a current account and may be drawn on demand.

It is also known as a demand loan, as it is repayable to the bank on demand by the bank.

For this reason, it is risky to use overdrafts for core financing needs.

2. Liabilities.

The amount by which an account is overdrawn.

Also known as an overdraft balance.

See also