Why overdraft matters to a first-time founder
It can cover a brief mismatch between customer receipts and bills without arranging a new loan each time. However, variable rates, fees and a bank’s right to reduce or demand repayment can make it unreliable for permanent financing.
Examples of overdraft
A studio has ¥400,000 in its account and must pay ¥750,000 of payroll two days before a ¥600,000 customer invoice arrives. A ¥500,000 agreed overdraft covers the ¥350,000 gap, then the receipt restores a positive balance.
Common misunderstanding
It is not free spare cash or a fixed-term loan. Interest normally applies only to the amount used, but fees may also apply. An unauthorised negative balance can carry higher charges or cause payments to be refused.
When to use it
Use it for short, predictable working-capital gaps when repayment is supported by near-term receipts. Compare the total cost with a working capital loan or credit line. Do not fund long-lived assets or recurring losses with a callable facility.