Borrowing from a Bank: Overdrafts
Overdrafts (and other short term bank borrowing facilities) are usually expressed in the bank's documentation to be available for a specific period. In practice, the bank will want to be able to withdraw the facility and call for repayment of borrowings at any time if it senses you are in trouble (without wishing to define precisely what circumstances would trigger repayment).
In the case of a term loan where repayment is required after a fixed period, the bank's documentation usually specifies various events of default which trigger early repayment. These events will normally include your failure to pay interest on time (and any other breach of the bank's terms and conditions), insolvency or threatened insolvency, ceasing trading and other matters adversely affecting the company or the loan security.
Cross-default provisions allowing the bank to call for early repayment if your company defaults on any other borrowings of your company (or your group of companies) may be required by the bank. These ought to be resisted if possible. Default on a relatively minor loan might trigger early repayment of other borrowings.
As with any other creditor it is appropriate to keep the bank in touch with your affairs-this could well tip the balance if you get into cash flow problems.