2 min read
Estimates an annualised cost including fees so you can compare offers like-for-like. Illustrative, not a statutory APR.
Step 1: confirm the cost
Find the interest rate and whether it is fixed or variable, every fee, and the total repayable in pounds. Check it matches the quote. This is the number you are really agreeing to. See total cost of credit.
Step 2: check security and guarantees
Look for any charge over company assets and, most importantly, whether a personal guarantee is required. This clause decides what is at risk if the company cannot pay. A no-PG, unsecured loan keeps your personal assets out of it.
Step 3: read the covenants
Identify any covenants — conditions you must maintain, like a minimum cover ratio or net worth. Breaching one can trigger default even if payments are met, so know what you must keep, not just pay.
Step 4: understand default and exit
Read the default clause (what lets the lender demand full repayment) and the early-repayment terms (any settlement charge). These govern what happens if things change. Ask the lender to clarify anything unclear before signing. See understanding loan agreements.
Check the numbers before you sign
Use the calculator to confirm the agreement's cost matches your expectation.
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 should I read first in a loan agreement?
Confirm the cost — rate, fees and total repayable — then the security and guarantee clauses, then any covenants, then the default and early-repayment terms. That order covers cost, risk and consequences.
How do I spot a personal guarantee in the agreement?
Look in the security or guarantee section for any clause making a director personally liable if the company cannot repay. If you want to avoid one, choose a lender that lends to the company with no personal guarantee.
What questions should I ask before signing?
Ask for the total repayable in pounds, whether the rate can change, what secures the loan, whether a personal guarantee is needed, what covenants apply, and what happens if you repay early or miss a payment.
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