2 min read
Definition
An interest-only conversion is an agreed, usually temporary change from a repayment schedule to interest-only, similar to a capital repayment holiday. It relieves short-term pressure but, because capital is not repaid during the switch, either extends the term or raises later instalments.
In plain terms
It hands you breathing space by pausing capital repayment — but the debt still has to be cleared, later and with more interest.
Why it matters for your company
Ask early if cash is tight; a planned conversion beats a missed payment. See capital repayment holiday.
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Read →Funding for UK limited companies
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