How to compare business loan offers properly

2 min read

Total repayableCompare on one number

All fees inFold in every charge

Non-price termsPG, flexibility, speed

Step 1 — get the total repayable for each offer

Ask every lender for the total amount you will repay, including all fees. This cuts through headline rates, flat rates and factor rates, which are not comparable as quoted. If a lender will not give you a total repayable, be cautious.

Step 2 — fold in every fee

Add the arrangement fee, admin charges and any early-settlement cost into the total. A low-rate loan with a hefty fee can cost more than a higher-rate loan with none. Use the true cost of borrowing calculator to line them up.

Step 3 — weigh the terms a rate hides

Price is not everything. Does the loan require a personal guarantee that puts your home at risk? Can you overpay or settle early without penalty? How fast is the money, and how flexible is the lender if you hit a bump? A slightly dearer loan with no PG and real flexibility can be the better deal.

Step 4 — match the loan to the need

Finally, check the structure fits the job: a lump-sum loan for a defined cost, a facility for recurring flexibility. The best-priced product is worthless if it is the wrong shape for the problem.

Compare like for like, then decide

On the same total-repayable basis, with the non-price terms weighed, the right choice usually becomes obvious.

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 the single best way to compare loans?

Convert every offer to its total repayable in pounds, with all fees included. That one number lets you compare products that quote their cost in different ways.

Should I ever pick a more expensive loan?

Sometimes. A slightly higher total can be worth it for no personal guarantee, faster funding, or the flexibility to overpay. Weigh the extra cost against what those terms are worth to you.

How do I compare a flat rate against an APR?

Convert both to total repayable, or ask for each as an APR. A flat rate typically equates to roughly double its headline number as an APR, so never compare them directly as quoted.