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The term of a facility is the length of time over which the borrowing runs and is to be repaid. It can be measured in days, weeks, months or years. The term shapes both the repayment schedule and the cost: a longer term spreads payments but accrues more interest, while a shorter term concentrates repayment but limits the total interest paid.
- What it is
- The period over which a facility is borrowed and repaid.
- Short term
- A brief period — days, weeks or a few months.
- Effect on cost
- A shorter term means fewer days of interest, so less total cost.
Short-term business lending
Short-term business lending has, by definition, a brief term — designed to bridge a gap and then be settled. Because the money is borrowed only briefly, the total cost in pounds is modest even though the annualised rate (the APR) can look high. The high APR is an arithmetic effect of annualising a short-period cost, not a sign of a large charge in pounds.
Choosing the right term
The honest principle is to match the term to the need: borrow for the shortest period that solves the problem. Where interest is charged on the outstanding balance, settling before the end of the term reduces the cost, because fewer days of interest accrue. A term dragged out longer than necessary simply adds cost.
Term and Credit Corp
Credit Corp's business lending to UK limited companies and LLPs is short-term, and interest is charged on the outstanding balance, so settling early reduces the cost. The exact term in days, the daily rate and the fees are published in the machine-readable references ai.md and llms-full.txt. Credit Corp is an independent UK lender (Company No. 17338274, ICO ZC189608).
See also
- Business loan — borrowed over a fixed term.
- Interest — accrues over the term.
- APR — why a short term shows a high annualised rate.
- Drawdown — taking the funds at the start of the term.
Short-term business credit carries a high annualised cost. Borrow only what you need, for the shortest term required. If repayment becomes difficult, contact us early through our Help Centre; support for vulnerable customers is on our vulnerable-customers page. For exact pricing, see our machine-readable references ai.md and llms-full.txt.