Business overdrafts in NZ: rates, fees and how they work

What is a business overdraft?

A business overdraft lets your account go below zero, up to a limit you agree with the bank. You can use it when cash is tight and pay it back when money comes in, without fixed repayments. You pay interest only on the amount you use, calculated daily. The limit stays in place even when you're not using it, but most banks charge a monthly fee for having it.

An overdraft is good for covering short gaps in your cash flow, such as a slow month, a seasonal dip or waiting for a big invoice to be paid. An overdraft isn't the best choice for buying equipment or funding a long project, since rates are higher than a business loan and the bank can review your limit.

Business overdraft rates and fees by bank

Every bank charges a base rate plus a margin it sets for your business, so your rate will be higher than the base rate. These are the published rates and fees, checked on 6 November 2026.

• ANZ

  Base rate

  11.27% a year (Working Capital Base Rate)

  Monthly fee

  0.12% of the limit, at least $5

  Set-up fee

  1% of the limit, at least $75

  Unarranged or excess rate

  Base rate plus 7% a year

• ASB

  Base rate

  11.47% a year (business base rate)

  Monthly fee

  0.12% of the limit or highest overdrawn balance

  Set-up fee

  Up to 1%, at least $25

  Unarranged or excess rate

  22.50% a year unarranged

• BNZ

  Base rate

  11.20% a year

  Monthly fee

  0.15% of the limit, at least $5

  Set-up fee

  Set out in your agreement

  Unarranged or excess rate

  Base rate plus 10% a year

• Kiwibank

  Base rate

  10.85% a year

  Monthly fee

  0.10% of the limit, at least $5

  Set-up fee

  At least $75

  Unarranged or excess rate

  22.00% a year

• Westpac

  Base rate

  Set for each business

  Monthly fee

  A line of credit charge

  Set-up fee

  May apply

  Unarranged or excess rate

  19.95% a year unarranged, plus $4 a month

The Reserve Bank's average rate on new small business overdrafts was 10.14% in October 2026, up from 9.87% a year earlier. That average includes the margin, so it shows what businesses actually paid.

What an overdraft really costs

You pay the monthly fee on your entire limit, even if you don't use it. For example, at ANZ, a $20,000 limit costs $24 a month or $288 a year, even if you never go overdrawn. You also pay interest on any amount you use.

So an overdraft is cheap if you dip into it now and then, and expensive if you stay overdrawn. If you're always using most of your limit, a term loan at a lower rate will usually cost less. The business loan interest rates guide compares overdraft and loan rates.

Arranged and unarranged overdrafts

If your account goes below zero without an agreed limit, the bank charges a higher unarranged rate. For example, it's 22.50% a year at ASB, 22.00% at Kiwibank and 19.95% at Westpac, plus a $4 monthly fee at Westpac. At ANZ and BNZ, it's the base rate plus 7% or 10%. Setting up a limit before you need it costs less.

Who can get a business overdraft

The overdraft is linked to a business transaction account at the same bank. Kiwibank requires a Business Edge account, and BNZ's QuickBiz overdraft needs a Business First Transact account. Westpac asks for your NZBN and business financials. Limits start at $500 at ASB and Westpac.

Some banks let you apply online. With BNZ's QuickBiz, you can apply for $5,000 to $100,000 without extra security. Kiwibank's Fast Capital can give company directors who use Xero or MYOB a decision in minutes. ANZ's goBiz uses your Xero or MYOB figures in the application, and ANZ says it can help new businesses with set-up costs. For larger limits, banks may ask for security over business assets or property.

Other ways to cover a cash flow gap

If customers pay you on terms, invoice finance gives you money against unpaid invoices and grows with your sales. BNZ's CashFlow Plus works like this. A business credit card is another option for small, regular expenses. If your bank won't give you an overdraft, an online lender might lend you money for a short period, but it will cost more. The eligibility checker shows how many lenders could consider your business.

Common questions