What is a kassekredit (overdraft facility)?

In short

A kassekredit is a flexible credit line on the business account: you can overdraw up to an agreed maximum and pay interest only on what you actually use.

In practice

The overdraft smooths liquidity swings — when VAT or payroll falls due before customers have paid, say. The interest rate is typically higher than a bank loan's, and banks often charge a commitment fee, so it suits short dips, not permanent financing.

Related terms

• Likviditet (liquidity)
• Likviditetsbudget (cash-flow budget)
• Bankafstemning (bank reconciliation)
• See every term in the dictionary

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