When it comes to managing the day-to-day, there are many calls on a business owners’ time. The last thing they want to worry about are overdrafts on their business accounts not to mention the fees that come along with it and the associated reputation risk if an item is retuned.
This is why many business owners today turn to overdraft protection which can help their business continue to operate smoothly in case of an overdraft. Here, Marlene Piche, SVP Branch and Business Banking, answers a few key questions about overdraft protection and why you should consider it for your business.
Q: What exactly is overdraft protection, and how does it work?
Marlene: Overdraft protection protects business accounts in the event of an accidental overdraft, like in the case of a returned check, an ATM withdrawal, a debit card charge, or a preauthorized electronic fund transfer when funds are low. It works as a line of credit connected to your USB Business Checking Account, and it automatically transfers funds over to that account whenever an overdraft occurs. This saves business owners both time and money; not only do they not have to manually transfer funds from various accounts to cover the costs, but it protects them from unnecessary overdraft fees. Business owners will have to pay back the overdraft advance plus interest later on, but in the moment, it can be a lifesaver.
Q: How does overdraft protection benefit businesses?
Marlene: I like to tell our business customers that overdraft protection will give them peace of mind. We know how busy they are today and mistakes or surprises sometimes happen, and overdraft protection is a great tool to protect their business. You know how you feel when you have a returned item from your customer, don’t let that happen to you.
Business owners also like to have overdraft protection to cover any financial gaps, like a late payment from a client, or to cover any unexpected expenses or emergency costs, like storm damage to a storefront. With overdraft protection, your business can keep on running while the line of credit covers the costs.
Q: What is unique about overdraft protection from USB?
Marlene: Most overdraft lines from other banks require the borrower to make a repayment actively. With our unique USB Business Overdraft Protection Line of Credit, once a deposit is made to the linked checking account, the overdraft line is automatically repaid, which is huge for our business customers. Again, it just gives them one less thing to worry about and remember to do in case of an overdraft on their checking account. And just as important it reduces interest paid.
Q: How do I apply for overdraft protection?
Marlene: USB business customers can apply for overdraft protection at one of our branches. All they need to do is fill out an application and answer some basic questions about their business, and we’ll let them know in a few days if they’re approved.
All loans and lines are subject to credit approval.