™
Business finance myths,
set straight.
A lot of received wisdom about company finance is half-true at best. This is an even-handed look at the common myths — personal guarantees, APR, who actually lends to companies — with the reality next to each. It is not a sales pitch, and where Credicorp comes up it is named as one example. As ever, the company borrows, never you personally.
Some of the most repeated lines about business borrowing are simply out of date, or true only in narrow cases. Believing them can cost a company money — or stop it taking finance that would genuinely help. The aim here is to be fair: name the myth, give the reality, and leave the decision with you.
Creditcorp is the growing name for the Credicorp group, and Credicorp Limited is the lender behind it. This page is general information, not a pitch and not an application. Where a Credicorp fact appears it is there to illustrate, not to push; the live terms always sit with the lender at credicorp.co.uk.
One thing to keep in view as you read: 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. This is not a personal loan, a payday loan or sole-trader finance.
Six myths, and the reality
Each card states a common belief, then sets out a fair, plain-English correction. Figures quoted are the lender's published product facts and can change — always check the live pages.
Myth: you always need a personal guarantee.
Not always. A personal guarantee is common in some lending, but it is not a law of nature. It depends on the lender and the product. Credicorp short-term products carry no personal guarantee at all — the company is the borrower, with no charge over a director's home and no personal credit check. Whether other lenders ask for one is a question to put to them directly.
Myth: APR is the only cost that matters.
APR is useful, but it is not the whole story — and for short borrowing it can mislead. APR annualises a cost, which suits borrowing held for a year or more. For credit measured in days or weeks, the total cost in pounds over the period you actually borrow is usually the more honest guide. Look at both, and match the measure to the term.
Myth: only banks lend to companies.
No. Banks are one source, not the only one. A range of specialist and non-bank lenders provide working capital to UK companies, often with different products, speeds and criteria. Credicorp is one such lender, offering short-term finance to incorporated businesses. The right source depends on the need — compare honestly rather than assuming.
Myth: short-term finance is always expensive.
"Expensive" depends on how long you hold it and how you repay. A high daily or annualised rate can still mean a small cost in pounds if the borrowing is short and cleared promptly. With Credicorp, interest on the Bridging Loan is charged on the outstanding balance, repaying early carries no penalty, and the total cost is capped at 100%. Judge the cost in pounds, over your actual term.
Myth: borrowing means the business is in trouble.
Often the opposite. Plenty of profitable, healthy companies use short-term finance to bridge the gap between paying suppliers and being paid by customers — to buy stock ahead of a season, or to take an order they could not otherwise fund. Using finance to grow or smooth cash flow is ordinary business practice, not a sign of distress.
Myth: a capped cost means there is a catch.
A cap is simply a ceiling. Every Credicorp product caps the total cost of credit at 100% of the amount borrowed, so a company can never repay more than twice the principal in charges. There is no hidden mechanism — it is a hard limit that protects the borrower's downside. The detail is on the products page and with the lender.
Two worth a second look
The personal-guarantee myth and the APR myth come up most, so they earn a little more space.
"You always need a personal guarantee"
This one matters because it can put directors off borrowing, or push them to sign away protection they did not have to. The truth is that a personal guarantee is a feature of some lending, not all of it. It turns a company debt into a personal one, often with a director's home behind it.
Credicorp's short-term products carry no personal guarantee: the agreement is between the lender and the company, with no charge over a home and no personal credit check on a director. Whether any other lender requires one is a fair question to ask them up front. We unpack the idea in full in no personal guarantee — what it means.
"APR is the only cost that matters"
APR is a genuinely useful tool — it lets you compare borrowing on a single yearly figure. But it annualises, which makes most sense for credit you hold for a year or more. For borrowing measured in days or weeks, an annualised number can look alarming while the actual cost in pounds is modest.
The fairer guide for short-term credit is the total cost in pounds over the period you actually borrow. Look at both, and match the measure to the term. The jargon buster defines APR and flat fee side by side, and the cost calculator shows the pounds for a given amount and term.
One myth worth getting exactly right
A final misconception is that all lending carries the same consumer protections. It does not. Credicorp lends only to bodies corporate — UK limited companies and LLPs — and under Article 60B of the FSMA Regulated Activities Order 2001, lending to a body corporate is not a regulated consumer-credit agreement. So this is business credit, not consumer credit, and the consumer-credit protections that apply to personal borrowing do not apply here. It is exactly the kind of thing worth understanding rather than assuming — the full, careful position is on lending and regulation and on the group site, creditcorpgroup.co.uk.
Where to go next
- Is short-term borrowing right for you? — an honest decision aid, including when not to borrow.
- No personal guarantee — what it means — the myth above, in full.
- The 100% cost cap — why a capped cost is a protection, not a catch.
- The jargon buster — APR, flat fee and the rest, defined plainly.
- Compare business finance — even-handed comparisons for directors.
- creditcorpgroup.co.uk — the deeper group, company and regulation detail.
When a product is the right fit, applying, drawing down and managing the account all happen on the lender's site, credicorp.co.uk.
Decide with clear eyes
The facts are above; the live terms are with the lender. When you are ready, everything customer-facing happens on credicorp.co.uk.