™
Credicorp vs a business
overdraft.
Two ways to cover a short-term working-capital gap. One tied to an existing bank relationship — one not. This guide sets out the differences plainly, so you can choose the right tool for the situation. In both cases, the company borrows, never you personally. Credicorp never takes a personal guarantee; your bank may.
A business overdraft and a Credicorp short-term company facility are both forms of working capital credit. But they are not the same product and they are not interchangeable. Getting this comparison right can mean the difference between fast access and a weeks-long application process, and between the company borrowing alone and you personally guaranteeing the debt.
This guide compares the two forms side by side — how they work, who can get them, how much they cost, and when each fits.
The comparison, side by side
Seven dimensions that matter for a working-capital decision.
| Feature | Bank business overdraft | Credicorp facility |
|---|---|---|
| Who can apply | UK limited companies with an existing business current account at that bank, typically 6+ months old | UK limited companies and LLPs with any active UK business bank account |
| Prior relationship needed | Yes — usually requires a business current account at the same bank | No — any UK business bank account accepted |
| Personal guarantee | Often required, depending on the bank and company profile | Never — Credicorp takes no personal guarantee on any product |
| Charge over property | Possible, particularly for larger facilities | Never — no charge over any director's or personal property |
| Approval speed | Days to weeks for new application; instant draw once approved | Same working day on approval; uses Open Banking for fast assessment |
| Cost structure | Arrangement fee + annual renewal fee + monthly fee + interest on drawn balance | 0.25% per day on drawn balance + £5 set-up; or flat 6% (Slice); capped at 100% of principal |
| Revolving access | Yes — draw and repay within the limit as needed | Yes (Flex facility); the Bridging Loan is a fixed-term advance |
When each option fits
Bank overdraft fits when…
- You already have an established business current account at a bank that offers one
- The bank does not require a personal guarantee for your company's profile
- The combined cost (fees plus interest) is lower than a Credicorp facility for your expected usage pattern
- The gap is genuinely revolving — you draw a little, repay, draw again regularly
- You are happy with the annual review process and the bank's ability to withdraw the facility
Credicorp fits when…
- You have no existing bank overdraft facility or have been declined for one
- You need access quickly — today or tomorrow — and can't wait days or weeks
- You want to keep the company's obligations separate from your personal finances entirely
- The need is a one-off, defined-term gap with a clear repayment source (Bridging Loan)
- The need is a single large supplier invoice to spread (Slice)
- You are a director of a newer company that banks won't yet extend an overdraft to
The personal guarantee question
This is the most important structural difference for many directors. When a bank takes a personal guarantee on a business overdraft, the director personally owes the money if the company cannot pay. It becomes the director's debt, not just the company's. This can appear in the form of a standard letter of personal guarantee, a debenture, or a fixed charge over the director's property.
Credicorp lends to the company only. Under the terms of every Credicorp product, no personal guarantee, no director indemnity, and no charge over any director's property is taken. If the company is unable to repay, Credicorp pursues the company — not the director.
See no personal guarantee — what it means and what no charge over your home means for the full legal context.
Five steps to decide which to use
Work through these in order. The right answer usually emerges by step three.
- Check whether a bank overdraft is already available. If your current business bank account has an overdraft attached and it is not at its limit, check the cost of using it for this need.
- If no overdraft exists, assess how quickly you need the funds. A new bank overdraft application can take days to weeks. If you need funds today, Credicorp's same-working-day timeline is the practical route.
- Compare the total cost for the specific term. Add all bank overdraft fees (arrangement, renewal, monthly, interest) for the period you expect to use the facility. Compare against the Credicorp equivalent for the same amount and term.
- Check whether a personal guarantee is required. If the bank requires a personal guarantee and you want to separate company from personal risk, Credicorp is the cleaner choice.
- Apply for whichever fits. If using an existing bank overdraft, draw via your business banking app or online portal. If applying to Credicorp, go to credicorp.co.uk/apply — assessment and funding happen on the operating lender's site, not here.
Overdraft vs Credicorp questions
What is the main difference between a business overdraft and a Credicorp facility?
A bank business overdraft is a revolving arrangement tied to a current account, usually requiring a pre-existing banking relationship and sometimes a personal guarantee from the director. A Credicorp facility is standalone — no existing banking relationship is needed, no personal guarantee is taken, and no charge over a director's property is required. The decision is based on the company's financial picture, not on how long it has banked with a particular lender.
Can any UK limited company get a business overdraft?
Not automatically. Most banks require the company to hold a business current account with them — often for six months or more — before offering an overdraft. They may also require a personal guarantee from the director, and newer companies are frequently declined. Credicorp considers applications from companies with active UK business bank accounts without requiring a banking relationship with Credicorp itself.
Is a business overdraft cheaper than a Credicorp loan?
Overdraft pricing varies by bank and arrangement. A bank overdraft often charges an arrangement fee (typically 1–2% of the facility), an annual review fee, and a monthly usage fee, plus an interest rate on the balance drawn. Total cost depends on how the facility is used. A Credicorp Bridging Loan charges 0.25% per day with a £5 establishment fee, capped at 100% of the principal. For a short, defined-term need (a few weeks), the Credicorp structure can be cheaper than carrying an overdraft facility with annual fees.
Does a business overdraft take a personal guarantee?
Many banks do require a personal guarantee for a business overdraft, particularly for smaller companies and newer businesses. Some do not, depending on the bank's policy and the company's profile. Credicorp does not take a personal guarantee on any of its products — the lending is to the company only, and no director is personally liable if the company fails to repay.
How quickly can Credicorp pay out compared to a bank overdraft?
A bank business overdraft involves an application and underwriting process that may take days to weeks, plus the requirement for an existing account. Once approved, an overdraft is available on demand. A Credicorp facility can typically be approved and funded same working day after application — there is no prior banking relationship required and the assessment uses Open Banking data and business credit bureau checks rather than a manual credit file review.
Related guides
No personal guarantee — what it means covers what the absence of a personal guarantee means legally and how to verify it. What a revolving credit facility is explains how Credicorp Flex works as a revolving line of credit. A loan or a facility covers the structural difference between the two shapes of credit. How to choose the right business finance gives a broader decision framework across all three Credicorp products.
Ready to apply?
Applications, the decision and account management all happen at the lender’s site, credicorp.co.uk.