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.
Step 1: map your cash-flow pattern
Chart your income and outgoings month by month to see when cash is strong and when it is thin. Seasonality, customer payment timing and lumpy costs all shape the pattern. This map is the basis for planning repayments that fit. See forecasting cash flow.
Step 2: size against the troughs
Set the repayment so it is comfortable in your quietest months, not just your busiest. If cover holds through the trough, it holds all year. A lower repayment via a longer term is the usual way to make it fit — see choosing a term.
Step 3: time the borrowing
Where you can, draw the loan just before you need it and arrange the schedule so heavier costs fall in stronger months. For seasonal businesses a seasonal structure aligns repayment to takings. See seasonal cash flow.
Step 4: keep every month positive
Drop the repayment into your forecast and confirm every month keeps a positive buffer, not a break-even. If a month turns tight, resize or extend. See forecasting repayments and headroom.
Model the fit
Use the calculator to find a repayment your cash-flow pattern can carry every month.
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
How do I plan loan repayments around cash flow?
Map your month-by-month cash pattern, size the repayment so it is comfortable in your quietest months, time the borrowing to your stronger periods, and confirm every month keeps a positive buffer in your forecast.
Should I size a repayment against my best or worst months?
Against your worst. If the repayment is comfortable in the quietest months, it will be comfortable all year. Sizing against peak months leaves you exposed when cash is thin.
How does a longer term help repayments fit?
It lowers each payment, making the repayment comfortable even in trough months and improving your cover ratio. The trade-off is more total interest, so extend only as far as you need to make it fit.
Related reading
How to forecast your loan repayments into your cash flow
A repayment only makes sense inside your cash-flow forecast. Seeing it in isolation tells you little;…
Read →
How to forecast your cash flow
A cash-flow forecast is simply a calendar of money in and money out, projected forward. Built well, it tells…
Read →Choosing the right loan term
The length of a loan is as important as the amount. A longer term lowers the monthly payment but raises the…
Read →
Seasonal borrowing: funding the gap between peaks
Seasonal businesses do not have a profit problem — they have a timing problem. Costs fall due before the busy…
Read →
Borrowing headroom: why you should leave a buffer
The amount you <em>can</em> borrow and the amount you <em>should</em> borrow are rarely the same. Headroom —…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.