2 min read
Definition
A rate reset happens at scheduled intervals — monthly, quarterly or on each interest period — when the reference rate is re-read and your rate updated. Between resets the rate holds; at each reset it catches up with the benchmark, which is when a base-rate move actually reaches your payment.
In plain terms
Your variable rate does not change continuously — it jumps at each reset to match where the benchmark has got to.
Why it matters for your company
Know your reset frequency so you can anticipate when a benchmark move hits your payment. See rate pass-through.
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Rate pass-through
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Reference rate
Reference rate is the benchmark a variable loan is priced against, such as SONIA or the base rate, before the…
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Reset frequency
Reset frequency is how often a variable rate is recalculated against the benchmark — the more frequent, the…
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The advance rate is how much of an asset's value a lender will lend against — 80% of invoices, say. The gap…
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.