How to pick between three finance offers

2 min read

Normalise costStep 1

Score the fitStep 2

Weigh the riskStep 3

Step 1 — Normalise the cost

Offers rarely quote cost the same way — one in APR, one as a flat rate, one as a factor rate. Convert all three to the same measure: the total cost in pounds over the actual term, including every fee. Only then are they comparable. Use the loan comparison calculator, and see flat rate vs APR and APR vs factor rate for the conversions.

Step 2 — Score the fit

Cheapest is not best if it does not fit. Score each offer on how well its shape matches your need — right amount, right term, right flexibility. An offer that forces you into a fixed sum when you need a flexible line, or a long term when you need a short one, loses points even if its rate is keen. See comparing any two options.

Step 3 — Weigh the risk

Check each offer for…
A personal guarantee (your assets exposed)
A charge over an asset
Recall-on-demand terms
Early-repayment or exit charges

An offer that is cheap and fits but demands a personal guarantee can rank below a slightly dearer one with nothing personal at stake. Read each for hidden risk — see reading a loan offer and no personal guarantee loans. Rank on all three steps together, not the headline rate.

The Credicorp view

Put any Credicorp offer through the same three steps: a transparent total cost you can normalise, a shape that fits your need, and no personal guarantee so nothing personal is at stake. Compare our business loans and Credicorp Flex line, or register to apply. Educational content, not financial advice.

Frequently asked questions

How do I compare three business finance offers?

Normalise all three to the same cost measure — the total in pounds over the actual term, including fees — so they are comparable. Then score how well each fits your need in amount, term and flexibility. Finally, weigh the risk in each, especially any personal guarantee. Rank on all three together, not the headline rate.

Why can't I just pick the lowest rate?

Because the rate hides too much. Offers quote cost differently, so a low headline can be dearer once converted. And the cheapest offer may not fit your need or may carry hidden risk like a personal guarantee. Comparing on normalised cost, fit and risk gives the real ranking.

What risk factor is most often missed?

A personal guarantee. An offer that is cheap and fits but exposes your personal assets can be worse value than a marginally dearer one with nothing personal at stake. Always check each offer for a guarantee, an asset charge, recall terms and exit fees before ranking.