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Bridging Loan vs an SME term loan.
Both put a lump sum into the business, but over very different stretches of time. One is settled in weeks; the other runs for years. Credicorp offers the short Business Bridging Loan — not the term loan. Here's how the two compare, and when a longer term loan is the better tool.
The cleanest way to choose between these two is to ask how long the need lasts. A Business Bridging Loan is built for a gap measured in weeks; an SME term loan is built for an investment measured in years. Match the length of the borrowing to the life of the thing you're funding.
Creditcorp 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 short Business Bridging Loan; it does not offer longer-term loans. A term loan is a multi-year repayment loan from a bank or an SME term lender. This page is a guide, not an application — when you're ready, applying happens on the lender's own site, 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. Term-loan terms vary widely by lender, so treat that column as a general picture, not a quote.
| Business Bridging Loan (Credicorp) | SME term loan (a bank or term lender — not Credicorp) | |
|---|---|---|
| Purpose | A short gap you can see the end of | A larger, longer-lived investment |
| Amount | £50 – £500 | Typically much larger, set by the lender |
| Term | 14 – 84 days, fixed up front | Usually one to five years or more |
| Repayment | Settled within the short fixed term | Regular monthly instalments over years |
| Pricing | 0.25% per day on the outstanding principal | An annual interest rate over the life of the loan |
| Set-up fee | £5 | An arrangement fee, often a percentage of the sum |
| Cost cap | Total cost never exceeds 100% of the principal | No standard cap; set by the lender |
| Best for | A known, short-term cost with a clear repayment in view | A major asset or investment that pays back over years |
| Personal guarantee | None | Often required, and larger loans are often secured |
| Borrower | The company | The company (often with a director's guarantee) |
Where they really differ
Three things separate them: how long you borrow for, how the cost behaves over that time, and what each is actually built to fund.
Term length — weeks versus years
This is the heart of it. A Bridging Loan runs for 14 to 84 days and is gone by the end of the quarter; a term loan runs for years, with the debt on the balance sheet for the long haul. Borrowing short for a short need keeps you out of long commitments you don't want; borrowing long for a long need keeps each repayment affordable. The mistake to avoid is using one where the other fits.
Cost shape — a short sprint versus a long road
The Bridging Loan charges 0.25% per day on the principal, with a £5 fee and the total capped at 100% of what you borrow — easy to total up because the term is short. A term loan quotes an annual rate, and because the money is out for years, the absolute interest can be much larger even at a lower headline rate. Neither is "cheaper" in the abstract: short borrowing suits a short need, long borrowing a long one.
What each is for — bridging versus building
A bridge covers a temporary gap: stock, a deposit, a repair, a few weeks until a customer pays. A term loan builds something lasting: new premises, a major machine, an acquisition. Try to bridge a multi-year purchase and the term is far too short; try to fund a two-week gap with a five-year loan and you're paying interest long after the need has passed.
When each one wins
Neither is better in the abstract. It comes down to whether your need lasts weeks or years.
A term loan fits better when…
The sum is large and the payback is long — new premises, a major asset, an acquisition. Spreading the cost over years keeps each repayment manageable, which a short bridge simply cannot do. For a long-lived investment, a term loan is the right shape.
→ An SME term loan (from a bank or term lender)A Bridging Loan fits better when…
The gap is short and you can name the figure — a stock order, a deposit, a repair, a few weeks until a customer pays. You want a modest set amount settled within weeks, the cost fixed and capped, and no multi-year commitment for a need that lasts only days.
→ Credicorp Business Bridging LoanThe company borrows — not you
This is one place the two genuinely part company. SME term loans frequently come with a director's personal guarantee, and larger facilities are often secured against company or personal assets. 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.
A worked example
An illustration, not a real customer — just to show the shape of the choice.
A trading company has two quite different needs in the same quarter. The first is a £400 supplier deposit to lock in a confirmed order, with the cash that clears it landing in about six weeks when the customer pays. The second is a plan to fit out a second unit — a far larger cost the company expects to recoup gradually over several years of extra trade.
The two needs want different tools. The short deposit fits a fixed-term Business Bridging Loan cleanly: a set sum over a set term of up to 84 days, the cost visible up front, settled when the customer pays — and no personal guarantee, because the agreement is with the company. The fit-out, by contrast, is a long-lived investment with a multi-year payback, so a longer SME term loan that spreads the cost over years would be the sensible call there. Reaching for a short bridge to fund the fit-out would leave too much to repay too soon.
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.
Does Credicorp offer a term loan?
No. Credicorp offers three products — a Business Bridging Loan, the revolving Credicorp Flex facility and Credicorp Slice — and a multi-year term loan is none of them. A term loan is a longer repayment loan, usually spread over one to five years or more, and it comes from a bank or an SME term lender, not from Credicorp. If what your company needs is a large sum repaid slowly over years, a term loan may suit you better, and this page is meant to help you see that clearly.
What is the real difference between the two?
Term. A Business Bridging Loan is short by design — £50 to £500, repaid over a fixed window of 14 to 84 days. A term loan stretches the same idea over years, with monthly repayments and, usually, a much larger sum. One bridges a gap you can see the end of in weeks; the other funds something whose payback runs over the medium term. Match the length of the borrowing to the life of the need, and the right answer tends to be obvious.
When is a term loan the better choice?
When the need is large and long-lived — buying a major asset, fitting out new premises, an acquisition or any investment that pays back gradually over years rather than weeks. Spreading a big cost over a long term keeps each monthly repayment smaller, which a 14-to-84-day bridge cannot do. If you are funding something with a multi-year payback, a term loan is the right shape and a short bridge would simply be the wrong tool.
When does a Business Bridging Loan fit better?
When the gap is short and you can see the other side of it — a confirmed stock order, a supplier deposit, a repair you cannot trade without, or covering a few weeks until a customer pays. You borrow a modest set amount over a set term of up to 84 days, with the cost fixed and capped, and you are not signing up to years of monthly repayments for a need that lasts only weeks.
How does the cost compare?
They are priced on different clocks, so a headline rate does not compare cleanly. The Bridging Loan charges 0.25% per day on the outstanding principal over a short term, with a £5 fee and the total cost capped at 100% of what you borrow. A term loan usually quotes an annual rate over years, so the absolute pounds of interest can be far larger simply because the money is borrowed for far longer. Short borrowing for a short need is generally the cheaper way to cover a brief gap; a long need borrowed short would be a poor fit.
Will I have to give a personal guarantee?
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. SME term loans, by contrast, frequently come with a director's personal guarantee, and larger facilities are often secured; worth checking the lender's terms before you assume the two are alike on that point.
Is this consumer credit or a payday loan?
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, and the whole journey is on the how-it-works overview.
Other comparisons
If you're weighing a buffer on the account or a revolving option instead, these may help.
- Business Bridging Loan vs a business overdraft — a fixed-term lump sum against an on-demand buffer.
- Credicorp Flex vs a business overdraft — a revolving facility against an account buffer.
- The three Credicorp products, side by side — Bridging Loan vs Flex vs Slice.
Or see all three Credicorp products on the products page, and compare them on 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.