# Bridging Loan vs a business overdraft.

Both cover a cash-flow gap, but they are different shapes of money. One is a fixed sum for a fixed job; the other is a buffer that sits on your current account. Credicorp offers the Bridging Loan — not the overdraft. Here's how the two compare, and when the overdraft is the better tool.

An overdraft is the borrowing most directors reach for first, because it's already sitting on the business account. A Business Bridging Loan is a different idea — a planned, finite sum for a job you can name. The right choice depends on whether your gap is predictable or not.

Credicorp is the growing name for the Credicorp group, and Credicorp Limited is the lender behind it. To be clear from the outset: **Credicorp offers the Business Bridging Loan; it does not offer overdrafts.** An overdraft is a feature of a business current account and comes from your bank. This page is a guide, not an application — when you're ready, applying happens on the lender's own site, [credicorp.co.uk](https://credicorp.co.uk/).

Throughout, the borrower is the **company** — a UK private limited company (Ltd), LLP or PLC — not the director who signs. No personal guarantee, no charge over a home, no personal credit check on a director. These are **not** personal loans, payday loans or sole-trader finance.

## Side by side

The Credicorp figures are the lender's published terms and can change — check the live product page before you apply. Overdraft terms vary by bank, so treat that column as a general picture, not a quote.

|  | Business Bridging Loan (Credicorp) | Business overdraft (your bank — not Credicorp) |
| --- | --- | --- |
| Shape | One agreed lump sum | An on-demand buffer on the current account |
| Amount | £50 – £500 | An arranged limit set by the bank |
| Pricing | 0.25% per day on the outstanding principal | Interest on the overdrawn balance, often plus an arrangement or usage fee |
| Term | 14 – 84 days, fixed up front | Open-ended; typically reviewed and renewable by the bank |
| Cost is known up front | Yes — fixed sum, fixed term | No — depends on how much and how long you're overdrawn |
| Cost cap | Total cost never exceeds 100% of the principal | No standard cap; set by the bank |
| Best for | A known, one-off cost with a clear repayment in view | An unpredictable buffer against the odd dip into the red |
| Can be withdrawn at short notice | No — the term is fixed once signed | Yes — banks can reduce or remove an overdraft on review |
| Personal guarantee | None | Often required by the bank — check your terms |
| Borrower | The company | The company (the account holder) |

## Where they really differ

Three differences matter more than the rest: how you get the money, how the cost behaves, and how secure the facility is.

### Availability — planned versus always-there

An overdraft's appeal is that it's already there: no fresh application each time, just a buffer you dip into when the balance runs low. A Bridging Loan is the opposite — you apply for a specific amount when you need it. That sounds like more effort, and it is, but it buys you certainty: the money is committed for the term, and it can't be pulled the way a bank can trim or withdraw an overdraft on a review.

### Cost shape — fixed versus ticking

With a Bridging Loan you know the cost on day one: 0.25% per day on the principal, over a term you set, with the total capped at 100% of what you borrowed. An overdraft charges on whatever you happen to be overdrawn by, for as long as you're in the red — often with an arrangement or usage fee on top. If you can predict the gap, the loan is easy to budget. If you can't, the overdraft only charges you when you actually use it.

### Flexibility — finite versus open-ended

The overdraft wins on pure flexibility for small, unpredictable dips: nothing to repay on a schedule, nothing owed when you're back in credit. The Bridging Loan wins when the need is a defined chunk with a defined payback — you're not relying on the bank's goodwill, and the company gives no personal guarantee in the process.

## When each one wins

Neither is better in the abstract. It comes down to whether your gap is a known job or an unpredictable wobble.

### An overdraft fits better when…

The need is small and unpredictable, you bank somewhere that will arrange one, and you want a buffer that charges only on the days you're actually in the red. For the odd dip, that flexibility is hard to beat.

### A Bridging Loan fits better when…

The gap is one-off and you can name the figure — a stock order, a deposit, a repair. You want the cost fixed and visible, and you'd rather not depend on a bank renewing a facility it can withdraw.

## The company borrows — not you

This is one place the two genuinely part company. A business overdraft frequently comes with a director's personal guarantee attached — the bank wants a name behind the buffer. The Credicorp Bridging Loan is the other way round: the agreement is between Credicorp Limited and your **company**, so the finance doesn't add to what's pinned to your own name.
- **No personal guarantee** — the company is the borrower, full stop.
- **No charge over your home** — your house isn't security for working capital.
- **No personal credit check on a director** — the lender looks at the business, not your own file.
- **Bodies corporate only** — UK Ltd, LLP or PLC, never a sole trader or an individual.

This is exempt business lending under Article 60B of the FSMA Regulated Activities Order 2001, not consumer credit. The full regulatory position is set out on the group site, [creditcorpgroup.co.uk](https://creditcorpgroup.co.uk/lending-and-regulation/).

## A worked example

An illustration, not a real customer — just to show the shape of the choice.

A trading company has a £400 supplier deposit due this week to lock in a confirmed order, and the cash that clears it lands in about six weeks when the customer pays. The director already has a small arranged overdraft on the business account, but it's earmarked for the usual month-end wobble and wouldn't comfortably stretch to the deposit on top.

Because this gap is one-off, has a known figure and a clear repayment in view, a fixed-term Business Bridging Loan fits it cleanly: a set sum over a set term, with the cost visible up front and the overdraft left free for its day-to-day job. The agreement is with the company, so the director gives no personal guarantee. Had the need instead been a string of small, unpredictable dips with no clear figure, leaning on the overdraft would have been the more sensible call.

## Common questions

The questions directors ask when weighing the two. For anything specific to your business, the lender's team are at credicorp.co.uk.

No. Credicorp offers three products — a Business Bridging Loan, the revolving Credicorp Flex facility and Credicorp Slice — and an overdraft is none of them. An overdraft is a feature of a business current account, so it comes from your bank, not from Credicorp. If a flexible buffer on your account is what you really want, an arranged overdraft from your bank may suit you better, and this page is meant to help you see that clearly.

Shape. A Business Bridging Loan is a single lump sum, agreed up front, repaid over a short fixed term — you know the amount, the term and the cost on day one. An overdraft is an on-demand buffer attached to your current account: it sits there unused until you dip below zero, then charges you on whatever you are overdrawn by, for as long as you are overdrawn. One is a planned, finite borrowing; the other is an open-ended safety net.

When the need is unpredictable and small, and you already bank somewhere that will arrange one. An overdraft shines as a buffer against the odd day you dip into the red — you pay only while you are overdrawn, and nothing when you are not. If you cannot say in advance how much you will need or when, that flexibility is genuinely useful. A bridging loan, by contrast, suits a known cost with a known repayment in view.

When the gap is one-off and you can name the figure — a confirmed stock order, a supplier deposit, a repair you cannot trade without. You borrow a set amount over a set term, so the cost is fixed and visible rather than ticking on an unpredictable balance. It is also a route that does not depend on your bank agreeing to extend or renew an overdraft facility, which banks can withdraw.

Not with Credicorp. The Business Bridging Loan agreement is between Credicorp Limited and your company — a UK limited company, LLP or PLC — so there is no personal guarantee, no charge over a home and no personal credit check on a director. Business overdrafts, by contrast, frequently come with a director's personal guarantee attached; worth checking your bank's terms before you assume the two are alike on that point.

Neither. This is business credit to a body corporate, not consumer credit, and it is not for sole traders or anyone borrowing in their own name. Under Article 60B of the FSMA Regulated Activities Order 2001, lending to a UK company sits outside the consumer-credit regime. The full position is on the group site, creditcorpgroup.co.uk.

More general questions are answered on the [FAQ](/faq/), and the whole journey is on the [how-it-works overview](/how-it-works/).

## Other comparisons

If you're weighing a revolving option or a supplier bill instead, these may help.
- [Credicorp Flex vs a business credit card](/compare/flex-vs-credit-card/) — two revolving routes, side by side.
- [Credicorp Slice vs invoice finance](/compare/slice-vs-invoice-finance/) — paying a supplier bill versus borrowing against money owed to you.

Or see all three Credicorp products on the [products page](/products/), and compare them on [credicorp.co.uk/compare](https://credicorp.co.uk/compare/).

## Ready when you are

If the Bridging Loan is the right fit, applying, drawing down and managing your account all happen on the lender's site, credicorp.co.uk.