2 min read
Definition
The cost of funds is the rate a lender itself pays to obtain capital — from deposits, wholesale markets or its own facilities. It moves with the base rate and market conditions, and the lender adds a margin for risk, costs and profit to set your rate.
In plain terms
Your rate starts with what the money costs the lender, then a mark-up on top. When their cost rises, yours tends to as well.
Why it matters for your company
Understanding cost of funds explains why rates move with the market regardless of your profile. See reference rate and credit margin.
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.