2 min read
Illustrative only. Assumes a fixed rate and equal monthly repayments (annuity). Your actual offer depends on Credicorp’s assessment of your company.
What a director's loan is
A director's loan is money you personally put into (or take out of) the company, recorded in the director's loan account. Lending your own money in can plug a short gap without a lender, but it ties up your personal cash and, when the company owes you, repayment depends on the company's fortunes.
The tax and record-keeping
Director's loans carry specific rules — interest, timing and tax charges can apply, especially if the company lends money to you and it is not repaid promptly. They must be recorded carefully. A business loan, by contrast, is a straightforward company liability with predictable treatment.
Why a business loan often wins
A business loan keeps your personal savings intact and puts the debt where it belongs — with the company, behind limited liability. It also builds the company's credit history, which a director's loan does not.
When a director's loan makes sense
A director's loan can suit a very short, small gap where arranging finance is not worth it, or an early-stage company with no borrowing options yet. Beyond that, external finance usually protects your personal position better. See no-PG loans.
Weigh the options
Use the calculator to see what a business loan would cost before dipping into your own funds.
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.
Frequently asked questions
What is a director's loan?
Money a director personally puts into or takes out of the company, recorded in the director's loan account. Lending your own money in can plug a short gap, but it ties up personal cash and carries tax rules.
Is a business loan better than a director's loan?
Often, yes. A business loan keeps your personal savings intact, places the debt with the company behind limited liability, and builds the company's credit history — none of which a director's loan does.
When should I use a director's loan?
For a very short, small gap where arranging finance is not worthwhile, or an early-stage company without borrowing options. Beyond that, external finance usually protects your personal position better.
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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.