2 min read
Definition
A deducted (or discounted) interest advance is where the lender subtracts the fee, or a chunk of interest, from the loan before paying it out. Borrow £50,000 with a £2,500 fee deducted and you receive £47,500 — but you repay interest on the full £50,000, so the effective rate is higher than the quoted one.
In plain terms
You pay to borrow money you never actually got your hands on, which quietly pushes the real cost above the sticker rate.
Why it matters for your company
When a fee is deducted from the advance, work out the rate on what you actually receive. See retained interest and arrangement fee and the APR.
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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Retained interest
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Arrangement fee and the APR
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APR
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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.