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Definition
The credit margin (or loan margin, or spread) is the percentage a lender charges over and above the reference rate. On a facility priced at “base + 4%”, the 4% is the margin. It is set by risk-based pricing and normally stays fixed for the life of the loan.
In plain terms
It is the bit of your rate the lender controls and you can influence. A stronger application earns a thinner margin; the benchmark on top of it is out of anyone’s hands.
Why it matters for your company
Negotiate the margin, not the benchmark — that is where the room is. Strengthen your profile first: see how to lower the APR you are offered.
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