What is overdraft protection and why would a business find it useful?

Overdraft protection is a financial service that allows a bank account holder to withdraw more money than is available in their account, up to a certain limit, without incurring a declined transaction. For businesses, this can be useful as it provides a safety net to cover unexpected expenses or cash flow shortages, ensuring that payments to suppliers and employees can be made on time. This can help maintain relationships with vendors and prevent disruptions in operations, ultimately supporting the business's financial stability. Additionally, it can help avoid costly overdraft fees and negative impacts on credit ratings.