2 min read
Definition
Overtrading describes a company expanding its sales and commitments faster than its working capital can fund, so that rising activity outpaces available cash. It's a paradoxical failure — the business is succeeding on paper while running out of money to operate.
In plain terms
It's the trap of too much success too fast: every new order needs cash up front for stock and staff, and if the cash isn't there, growth chokes the business.
Why it matters for your company
The fix is funding the growth's working-capital gap deliberately rather than being caught out. Credicorp lends to the company with no personal guarantee. See funding growth and the working capital calculator.
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Read on Tools →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.