How existing debt affects what you can borrow

New borrowing sits on top

A lender does not assess a new loan in isolation. It adds the new repayment to everything you already pay — existing loans, asset finance, overdraft interest, leases — and checks the total against your cash. The more you already service, the less room remains.

How commitments are counted

Regular, contractual outgoings all count against the cash available for new debt in the cover ratio. Even facilities you rarely draw, like an overdraft limit, can be weighed. A lender wants the full picture of your fixed obligations.

Making room for new finance

Clearing or refinancing an expensive existing facility frees up monthly cash and lifts your capacity for new borrowing. So does improving cash flow. Sometimes consolidating several debts into one cheaper facility is the cleanest way to make space.

Gearing matters too

Beyond monthly affordability, heavy existing debt raises your gearing, which makes lenders more cautious regardless of cash. Keeping gearing sensible preserves your borrowing headroom. See calculating gearing.

See your remaining capacity

Use the calculator to enter your commitments and see the room left for new borrowing.

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.