2 min read
Definition
Return on borrowing compares the incremental profit that borrowed money produces against the cost of that money. If £50,000 at 12% (£6,000 a year in interest) lets you win contracts adding £20,000 of profit, the borrowing more than earns its cost. When the return falls short of the rate, the debt erodes rather than builds value.
In plain terms
It is the only question that really matters before borrowing: does the money make more than it costs?
Why it matters for your company
Run the numbers before you sign, not after. Use the return on borrowing calculator and see how to decide if borrowing is worth the interest.
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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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.