2 min read
Definition
The effective cost of a fee expresses a lump-sum charge as its impact on the annual rate. A fee paid upfront adds to the APR; a deducted fee costs more because you pay interest on money you never received; a capitalised fee costs more still, accruing interest over the term.
In plain terms
A flat fee is never just its face value — how and when it is charged decides how much it really adds to your rate.
Why it matters for your company
Always fold fees into the APR or total repayable, and prefer paying them upfront. See arrangement fee and the APR.
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Arrangement fee and the APR
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Capitalised arrangement fee
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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.