2 min read
Definition
Margin compression occurs when lenders’ margins narrow, often because competition or abundant funding pushes down the spread over their cost of funds. In a competitive market it can mean lower rates for strong borrowers — a good time to negotiate or refinance.
In plain terms
When lenders compete hard, the mark-up they charge shrinks — and borrowers with a strong case can grab a keener deal.
Why it matters for your company
Use competitive conditions to negotiate a thinner margin or refinance. See cost of funds and how to negotiate a lower 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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