Our Verdict
There is no single best business overdraft; the one you can get depends on where you bank. If you can’t get one from a lender you already use, Zempler is the best free-account route to an overdraft, and Metro Bank and Virgin Money are open to new applicants.
If you already hold a business account with HSBC, Lloyds, NatWest, RBS, Santander or the Co-operative Bank, check your own bank first: those overdrafts are open to existing customers only, and the Co-op publishes the lowest rate we verified.
Don’t count on Tide, Revolut or Starling here: the first two offer no overdraft, and Starling has paused new applications.
Open a free Zempler account →Every provider checked against its own official pricing on 24 July 2026.
If you need an arranged business overdraft, the first question isn’t the rate, it’s whether you can get one at all. We checked every provider below against its own official pricing on 24 July 2026.
It’s Thursday, payroll runs Monday, and your client’s invoice won’t clear until Wednesday. That short gap is what an overdraft is for, and it’s exactly where the market is thinner than it looks.
Several banks lend only to existing customers, one has paused new applications, and one popular app has no overdraft at all. The table sorts them by whether you can actually apply today.
Business Bank Accounts With Overdrafts Compared
You get a separate row wherever eligibility, rates or fees differ materially, so Monzo’s two products never blend. How you apply (app, online, phone or branch) sits in its own column, kept apart from whether you can apply as a new customer.
| Provider | Application status | How you apply | Eligible structures | Published maximum | Representative rate | Overdraft fee (arrangement / annual) | Security / guarantee | Account required? | CASS | Source (checked 24 Jul 2026) | Action |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Metro Bank | Open to new banking customers | Online, branch, phone | Sole trader, Ltd, LLP (7+ months trading) | up to £60,000 | 14.13% EAR (variable, up to £25,000) | Arrangement 1.75% or £50; renewal 1.25% or £50 (none up to £500) | May be required | Yes (Metro business account) | Yes | metrobankonline.co.uk | Check eligibility → |
| Virgin Money | Open to new banking customers | Online, phone | Sole trader, Ltd (12+ months trading) | up to £25,000 (unsecured) | 13.0% EAR representative (assumes the full £25,000 drawn for 12 months) | Establishment fee 2.5% (min £120) | May be required | Yes (business current account) | Yes | uk.virginmoney.com | Check eligibility → |
| Monzo (sole trader) | Open to new banking customers | App | Sole trader | up to £3,000 | 39% EAR representative (some offered 29%) | No facility fee | Personal credit assessment | Yes (Lite, free) | Yes | monzo.com | Open account → |
| Monzo (limited company) | Open to new banking customers | App | Limited company | £500 to £5,000 | 35.9% EAR representative (19% / 29% / 35.9%) | Annual fee £20 / £50 / £100 by limit band | Personal credit assessment | Yes (Lite, free) | Yes | monzo.com | Open account → |
| Zempler Bank | Invitation or eligibility dependent | App, online | Sole trader, Ltd | up to £10,000 | Personalised (interest above a £5 daily buffer) | Annual fee on accounts opened since Jan 2023 | Varies on assessment | Yes (Business Go, free) | Yes | zemplerbank.com | Open free account → |
| Barclays | Invitation or eligibility dependent | Online, branch | Sole trader, Ltd, partnership | up to £50,000 (unsecured) | Personalised | Individually agreed | May be required | Yes | Yes | barclays.co.uk | Check eligibility → |
| TSB | Invitation or eligibility dependent | Online, branch, phone | TSB business customers | No published maximum | Personalised (no representative rate published) | Individually agreed | May be required | Yes | Yes | tsb.co.uk | Check eligibility → |
| HSBC UK | Existing account holders only | Online, phone | HSBC business account holders | No published cap (set individually) | 14.54% EAR representative | Arrangement min £25, plus annual renewal fee | May be required | Yes (existing) | Yes | business.hsbc.uk | Log in to apply → |
| NatWest | Existing account holders only | Online, app, branch | Existing NatWest business customers | up to £50,000 (unsecured) | Personalised | Arrangement £50 / £75 / £100, or 1.5% (min £150) above £5,000 | May be required | Yes (existing) | Yes | natwest.com | Log in to apply → |
| RBS | Existing account holders only | Online, app, branch | Existing RBS business customers | up to £50,000 (unsecured) | Personalised | Arrangement £50 / £75 / £100, or 1.5% (min £150) above £5,000 | May be required | Yes (existing) | Yes | rbs.co.uk | Log in to apply → |
| Lloyds Bank | Existing account holders only | Online, branch, phone | Existing Lloyds holders (sole trader, Ltd, LLP) | £500 to £50,000 | 15.62% EAR representative (variable, tracks BoE Base Rate; up to £25,000) | £12/month (£500 to £5,000); 1.99% a year, min £150 (£5,001 to £25,000) | Guarantee may be needed (Ltd / LLP) | Yes (existing) | Yes | lloydsbank.com | Log in to apply → |
| Santander | Existing account holders only | Online, phone, branch | Existing Santander holders (sole trader, Ltd, LLP, partnership) | £500 to £25,000 | 14.94% EAR representative | Annual fee 1.75% (min £100) | Guarantees from all directors or members (Ltd, LLP) | Yes (existing) | Yes | santander.co.uk | Log in to apply → |
| Co-operative Bank | Existing account holders only | Online, phone | Sole trader, Ltd, partnership | up to £250,000 | 10.20% EAR representative (£25,000 over 12 months) | Arrangement 1.5% or £50 (Plus / FSB exemptions) | May be secured above £10,000, usually a personal guarantee | Yes (existing) | Yes | co-operativebank.co.uk | Log in to apply → |
| Verified 24 July 2026. | |||||||||||
Start with the application-status column: if a bank won’t take a new customer, its headline rate is academic when your invoice is late and payroll is due at month-end. The table runs from open-to-new providers down to existing-customer-only routes.
You can trace every figure to the provider’s official pricing, all checked on 24 July 2026. A representative rate is an example, not the rate you’ll be offered; a personalised rate is set individually on application.
Can You Apply for an Overdraft Today?
Whether you can apply today turns on your existing banking as much as your credit file. Five statuses cover the market, and two of them mean the answer is no.
How you apply (app, online, phone or branch) is a separate matter, shown in the table above, so an app-based product is never mistaken for a closed one.
| Status | What it means | Providers |
|---|---|---|
| Open to new banking customers | You can apply without already banking there, subject to status | Metro Bank, Virgin Money, Monzo |
| Invitation or eligibility dependent | Offered once you meet criteria, sometimes at or shortly after opening | Zempler, Barclays, TSB |
| Existing account holders only | You must already hold that bank’s business current account | HSBC, Lloyds, NatWest, RBS, Santander, Co-operative Bank |
| Applications paused | Not accepting new applications; existing facilities may continue | Starling |
| Not offered | No business-account overdraft exists | Tide, Revolut, ANNA |
| Verified 24 July 2026. | ||
If a provider won’t lend to you today, its rate is academic. So a paused or not-offered product can’t win anything here, and none of them carries a pick below.
Our Current Picks by Business Need
There is no single best overall overdraft, because the right one turns on whether you already bank somewhere and how much you need. These are the picks we’d make for different needs, and none is a paused or not-offered provider.
Best for a New Applicant
Metro Bank is one of the few business overdrafts you can apply for without already banking there. Limits run up to £60,000, with a published 14.13% EAR (variable) on arranged overdrafts up to £25,000.
You’ll need at least seven months of trading and a Metro business account, and a personal guarantee or security may be required. The fee is 1.75% or £50 to arrange, then 1.25% or £50 to renew, with nothing charged up to £500.
Our Metro Bank business account review covers the wider account. The other route open to new customers is Virgin Money, with an unsecured overdraft up to £25,000 after 12 months’ trading.
Best Free Account With an Overdraft Route
Zempler Bank keeps the account free (Business Go has no monthly fee) and adds an arranged overdraft up to £10,000 once you’re eligible. Limited companies can be invited at opening or after about three months; sole traders after three months.
You pay interest on the daily balance above a small interest-free buffer, and accounts opened since January 2023 also carry an annual fee. The rate is set for you on application rather than published, so treat it as personalised.
Our Zempler Bank review covers the wider free account and its eligibility route.
Open a free Zempler accountBest App-Based Facility for Sole Traders
For a sole trader who needs a small buffer, Monzo offers an in-app overdraft up to £3,000, decided in the app on a personal credit assessment. You pay interest only on what you use, with no separate facility fee.
You pay for that access: the representative rate is 39% EAR, and some applicants are offered 29%. At that rate it’s a short-term buffer, not a borrowing plan you lean on for weeks. Our Monzo business account review covers the wider account.
Best Published Pricing
The Co-operative Bank publishes the lowest representative rate we verified, 10.20% EAR (variable) on an assumed £25,000 over 12 months. You need to hold a Co-op business account first, so it rewards existing customers.
The arrangement fee is 1.5% of the limit or £50, whichever is greater, with exemptions on the Business Bank Account Plus and FSB accounts. The Co-op may take security if you ask for a limit above £10,000, and when it does, that’s usually a personal guarantee.
Best Higher Limit
If you expect to need a large facility, the Co-operative Bank publishes the highest ceiling here, up to £250,000 (more by discussion), for existing Co-op business customers. That capacity is the reason to bank there.
You can get a bigger limit from HSBC too. It doesn’t publish a maximum, setting each facility individually at a representative 14.54% EAR, with a £25 minimum arrangement fee and a renewal fee. Both are existing-customer routes, so plan ahead for a large limit.
Best Soft-Search Eligibility Journey
If you already bank with Lloyds, you can see an indicative overdraft rate up to £25,000 without a mark on your credit file, before any formal application. The overall facility runs from £500 to £50,000.
Lloyds publishes a representative 15.62% EAR (variable, tracking the Bank of England Base Rate) on unsecured overdrafts up to £25,000. The facility fee is £12 a month on £500 to £5,000, then 1.99% a year (minimum £150) on £5,001 to £25,000.
Your final rate and fee still depend on assessment, so treat 15.62% as a representative example, not a guaranteed quote. A guarantee may be needed for limited companies and LLPs.
What a Business Overdraft Really Costs
An overdraft costs you in two separate ways: interest on what you borrow, and a fee for having the facility at all. The second one is easy to miss, because you pay it even in a month you stay in credit.
Picture month-end: a VAT bill lands before your biggest customer pays. That’s the gap you’re pricing here.
Interest Rates and Personalised Pricing
A published rate is only ever a representative example, not the rate you’ll be quoted. Verified representative rates here run from 10.20% EAR at the Co-operative Bank to 39% EAR on a Monzo sole-trader facility. Yours depends on the amount, the term and your credit profile.
Several banks don’t publish a rate at all, so you can’t shortlist them on price up front. NatWest, RBS, TSB and Barclays set the rate individually, so we show those as personalised rather than invent a figure.
Interest is charged only on the balance you actually use, day by day. A limit you hold but don’t draw on costs nothing in interest, which is the whole appeal of an overdraft over a fixed loan.
Arrangement, Annual and Renewal Fees
The fee is where an overdraft quietly costs you, even in a month you never draw on it. Most providers charge a percentage of the agreed limit to set it up, then again to renew it each year, and you pay whether or not you borrow.
Santander, for example, charges 1.75% of the agreed overdraft with a £100 minimum, payable on drawdown and at each annual renewal, even if the facility sits unused. Metro splits it into a 1.75% arrangement fee and a separate 1.25% renewal fee.
Keep the account monthly fee separate from what you pay for the overdraft. That charge pays for the account itself, not the overdraft, and it stacks on top of any arrangement or renewal fee.
First-Year Cost vs Cost of Just Holding the Facility
The table below shows what you’d pay in three situations. The figures use a representative 15% EAR for illustration; your rate may differ.
| Scenario | Interest (at ~15% EAR) | Typical fee | Roughly what it costs |
|---|---|---|---|
| £1,000 used for 30 days | about £12 | arrangement / annual fee still applies | £12 plus the fee |
| £5,000 used for 30 days | about £62 | arrangement / annual fee still applies | £62 plus the fee |
| £10,000 limit held, never drawn | £0 interest | 1.75% of the limit (min £100) | £175 a year for the option alone |
| Interest is illustrative at a representative 15% EAR; the fee example uses Santander business overdraft pricing (santander.co.uk), checked 24 July 2026. | |||
That bottom row is the point most comparisons skip: a facility you never touch isn’t free. Set up a £10,000 limit at Santander’s 1.75%, never draw on it, and a year later you’ve still paid £175 for the option.
So if you only need cover once or twice a year, a business credit card with an interest-free window can beat paying an annual fee to hold an overdraft you rarely use.
Can Your Business Qualify?
You can pass the account check and still be turned down for the overdraft on the same application. Overdraft approval is stricter than opening an account, and two things decide it: your structure and trading history, and the security you can offer.
| Requirement | What providers look for |
|---|---|
| Trading history | Metro asks for 7+ months; Virgin Money for 12+ months; app lenders assess your personal credit where the business is young |
| Legal structure | Sole traders, limited companies and partnerships are all served, but not by every provider; Monzo splits sole-trader and limited-company facilities entirely |
| Existing relationship | HSBC, Lloyds, NatWest, RBS, Santander and the Co-op lend only to their own business account holders |
| Security and guarantees | Whether a guarantee is required depends on the provider, structure and facility. The Co-op may take security above £10,000, usually a personal guarantee; Santander requires guarantees from all directors or members for limited companies and LLPs |
| Verified 24 July 2026. | |
Your trading history and structure. The younger your business, the more weight falls on the director’s personal credit file. There’s no single universal threshold; it varies by provider, so check the minimum before you apply.
Security, guarantees and your credit check. Providers run a creditworthiness check, but whether the search is hard or soft, and whether a personal guarantee is required, depends on the provider, your business structure and the facility.
A guarantee makes you personally liable. It doesn’t automatically give the lender a charge over your home, but if the company can’t repay, the lender can pursue the guarantor’s personal assets. Apply well before month-end, so a decline doesn’t leave you without cover the week payroll is due.
Can You Switch a Business Account With an Overdraft?
You can switch the account, but not the debt. The Current Account Switch Service (CASS) moves your balance, direct debits and standing orders to a new bank in seven working days, and Tide, Zempler, Monzo, Starling and every high-street bank here are participants.
When you switch banks, your overdraft doesn’t come with you. CASS won’t guarantee the receiving bank will accept, match or transfer an existing overdraft debt, so you must agree a new facility with the new bank separately.
On the Monday after your switch completes, the payments have moved across but the overdraft hasn’t, and an invoice lands with nothing behind it. So get approval for the new overdraft before you close the old account; running both in parallel for a week beats a gap with no cover.
When an Overdraft Is the Wrong Choice
Reach for a different product when your borrowing is large or predictable. An overdraft is generally best suited to short, unpredictable cash-flow gaps, so for anything else one of these is usually cheaper.
| What you actually need | Better fit than an overdraft |
|---|---|
| Long-term, predictable borrowing | A business loan with a fixed rate. See our overdraft alternatives guide |
| A flexible facility not tied to your bank | A revolving credit facility. Compare revolving credit vs an overdraft |
| Interest-free breathing room on purchases | A business credit card with a 45 to 56 day interest-free window |
| Cash tied up in unpaid invoices | Invoice finance, which advances against the invoices themselves |
| Verified 24 July 2026. | |
If a flexible line is what you’re after, our guide to revolving credit facilities sets out where they beat an account overdraft.
Providers Without a New Business Overdraft
You’ll see these providers in overdraft searches, but none can be picked here, because none offers a verifiable new-applicant overdraft today. We list them so the gap is explicit.
| Provider | Status | Detail |
|---|---|---|
| Starling | Paused | Not accepting new business overdraft or loan applications; existing facilities may continue. Its arrangement fee was 1.75% of the agreed limit or £50, whichever is greater, at acceptance and annually, so it was not fee-free |
| Tide | Not offered | No business-account overdraft on any plan. Tide partners with iwoca for separate business loans. Still a free account, and a CASS participant via ClearBank |
| Revolut | Not offered | No UK business-account overdraft identified on its official pages |
| ANNA Money | Not offered | An e-money account rather than a bank; any credit is a third-party facility, not an arranged overdraft |
| Bank of Scotland | Not verified this update | An existing-customer overdraft appears to exist, but its official terms could not be verified on 24 July 2026, so it is excluded rather than listed on unconfirmed figures |
| Verified 24 July 2026. | ||
Tide remains a strong free account if you pair it with a card for short gaps. See our Tide business account review and Starling review for the wider accounts.
Frequently Asked Questions
Which business overdrafts are open to new customers?
Metro Bank, Virgin Money and Monzo will consider new applicants, subject to status. Metro and Virgin Money set a trading-history minimum (seven months at Metro, twelve at Virgin Money), while Monzo decides its in-app overdraft on a personal credit assessment. Zempler may offer one during or shortly after account opening. HSBC, Lloyds, NatWest, RBS, Santander and the Co-operative Bank lend only to existing business account holders, and Starling has paused new applications.
Does Tide offer a business overdraft?
No. Tide doesn’t offer a business-account overdraft on any plan. It partners with iwoca for separate business loans instead. Tide is still a useful free account, and pairing it with a business credit card can cover short cash-flow gaps.
Is Starling still offering business overdrafts?
Not to new applicants. Starling has paused new business overdraft and loan applications; existing facilities may continue. When it was open, the arrangement fee was 1.75% of the agreed limit or £50, whichever is greater, charged at acceptance and annually, so it was never fee-free.
Can I switch my overdraft to a new bank?
The Current Account Switch Service moves your account and payments in seven working days, but it doesn’t move an overdraft debt. The receiving bank isn’t obliged to match or transfer your existing overdraft, so you must agree a new facility with it separately. Apply for the new one before you close the old account.
What does a business overdraft actually cost?
Two things. First, interest on what you use: verified representative rates here run from about 10% to 39% EAR, and several banks set the rate individually. Second, an arrangement or annual fee, often 1.5% to 2.5% of the limit with a minimum charge, which you pay even if you never draw on the facility.
How We Compared Business Overdraft Accounts
Product universe and inclusion. We include UK business current accounts that offer, or are commonly searched for, an arranged overdraft. A provider joins the active comparison only when its current terms were verified against its own official pricing this update.
Providers we couldn’t verify, or that no longer offer an overdraft, sit in the status-only section and are never ranked.
Application status. We label each provider as open to new banking customers, invitation or eligibility dependent, existing account holders only, applications paused, or not offered, and record app, online, phone and branch applications separately. A paused or not-offered product can’t carry a pick.
Rates and fees. A published representative rate is shown as such; where a provider sets the rate individually, we show “personalised” rather than invent a figure. The account monthly fee and the overdraft arrangement or annual fee are always shown separately.
Cadence and corrections. Every provider was checked on 24 July 2026, and we re-verify whenever a provider changes pricing, eligibility or availability. If you spot a figure that has moved, tell us and we will correct it.
Some links on this page are affiliate links; see our editorial policy. This page is editorial content, not regulated financial advice, and credit is subject to status and approval.
Change Log
If you compared these accounts before 24 July 2026, several things changed. We removed Tide after confirming it offers no business-account overdraft, and dropped Starling as a winner after it paused new applications.
You’ll also see Monzo split into sole-trader and limited-company rows, a corrected switching section, application status shown separately from how you apply, Lloyds’ figures restored, HSBC’s headline maximum replaced by its individually-set limit, and TSB and Barclays marked as individually priced.