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Definition
The prime rate is the interest rate a bank charges its most creditworthy clients. Other borrowers are priced at prime plus a margin reflecting their risk.
In plain terms
It is the "best price in the shop". Very few businesses get exactly prime; most pay a spread above it based on their creditworthiness.
Why it matters for your company
Strengthening your accounts and payment record narrows the margin over the benchmark, cutting your real cost of borrowing over time. See improving creditworthiness.
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Base rate
Base rate is the headline interest rate set by the Bank of England, which influences the cost of borrowing…
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Basis point
A basis point is one hundredth of one percent (0.01%) — the precise unit lenders use so '25 basis points' can…
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Margin
Margin is the fixed percentage a lender adds on top of a reference rate (such as the Bank of England base…
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Creditworthiness
Creditworthiness is a measure of how likely a business is to repay money it borrows, based on its trading…
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.