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Definition
SONIA measures the average interest rate banks pay to borrow sterling overnight from other institutions. Since the end of 2021 it has replaced LIBOR as the reference rate for most new sterling lending. A variable business loan is often priced as compounded SONIA plus a margin.
In plain terms
It is the wholesale cost of money that your variable rate is built on top of. When SONIA moves, the base of your rate moves with it — the margin stays fixed.
Why it matters for your company
If your facility is SONIA-linked, your payments track the benchmark. Understand the pass-through with how SONIA-linked loan pricing works and stress-test rises with the loan repayment calculator.
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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Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.