# Daily interest: how the cost builds up. Daily interest is the simplest pricing model in short-term business credit: a fixed percentage of the outstanding balance, charged once per day. You borrow an amount, pay 0.25% of it per day, and the cost stops the day you repay. No monthly compounding, no penalty for early payment. On every Credicorp product, **the company borrows, never you personally**. No personal guarantee. Creditcorp is the growing name for the Credicorp group, and Credicorp Limited is the lender behind it. It does one thing: short-term working capital for incorporated UK businesses. This page is a guide, not an application; applying happens on the lender's own site, [credicorp.co.uk](https://credicorp.co.uk/). ## The daily rate, explained Credicorp charges 0.25% of the outstanding principal per day. That is the whole pricing model — no hidden monthly fees, no compounding within the draw, no flat origination charge beyond a one-time £5 establishment fee. To see the cost for any day, multiply the balance by 0.0025. **Example at £10,000 principal:** - Day 1 interest: £10,000 × 0.0025 = £25 - 7 days: £25 × 7 = £175 - 14 days: £25 × 14 = £350 - 30 days: £25 × 30 = £750 - 60 days: £25 × 60 = £1,500 The total cost is capped at 100% of the amount borrowed. On a £10,000 advance, the maximum you could ever pay in interest is £10,000 — and the cost stops accruing if you repay early. ## Worked examples At three different amounts, three different holding periods. Principal × rate × days. ### Example 1 — £5,000 over 14 days - Daily charge: £5,000 × 0.0025 = £12.50 - 14 days' interest: £12.50 × 14 = £175 - Plus establishment fee: £5 - **Total cost: £180** — on a £5,000 advance ### Example 2 — £20,000 over 30 days - Daily charge: £20,000 × 0.0025 = £50 - 30 days' interest: £50 × 30 = £1,500 - Plus establishment fee: £5 - **Total cost: £1,505** — on a £20,000 advance ### Example 3 — Flex facility, partial draw This example shows how Flex works when the drawn balance changes mid-way through. - Days 1–14 (£15,000 drawn): £15,000 × 0.0025 × 14 = £525 - Days 15–27 (£5,000 drawn after partial repayment): £5,000 × 0.0025 × 13 = £162.50 - Day 28: balance cleared - **Total interest: £687.50** With Flex, interest accrues only on the drawn portion. The undrawn headroom costs nothing. ## The 100% total cost cap Across all three Credicorp products, the total cost of credit — all interest and fees combined — can never exceed 100% of the amount borrowed. On a £10,000 advance, the maximum total you would ever repay is £20,000 (£10,000 principal + up to £10,000 in costs). In practice, short-term borrowing held for days or weeks will cost a small fraction of that ceiling. ## Daily rate vs APR — why the comparison breaks down APR (Annual Percentage Rate) was designed to compare credit held for a year or more. Applying it to a 14-day or 30-day advance produces a very large-looking percentage because APR assumes compounding over 12 months — which is simply not how a short bridge works. A £5,000 advance held for 14 days costs £175. If you think of that as two weeks of a one-year loan and annualise it, the APR figure looks alarming — but the actual cash cost is £175 for the use of £5,000 for a fortnight. The two numbers are measuring different things. For short-term working capital, the useful figure is total cost of credit: principal × daily rate × days plus the £5 fee. That is what the company actually pays. ## How to calculate the cost for your company Four steps, no specialist knowledge required. 1. **Decide how much you need to draw.** Borrow only what the gap requires — daily interest means every extra £1,000 adds cost. 2. **Estimate how long you will hold it.** If you have a confirmed order paying in 21 days, you have a realistic repayment date. 3. **Multiply: principal × 0.0025 × days = interest.** Add £5 for the establishment fee. 4. **Check against the 100% cap.** For any advance, the total cost (interest + fee) can never exceed the amount drawn. Use the [Bridging Loan cost calculator](/tools/bridging-loan-cost/) or the [Flex facility cost calculator](/tools/flex-facility-cost/) to get a precise figure for any scenario. ## Daily interest questions **Does Credicorp compound interest?** No. Each day's charge is 0.25% of the outstanding principal. There is no compounding within a draw — the rate does not grow, and interest does not accrue on interest. **What happens if I repay early?** Interest stops on the day of repayment. No early repayment penalty, no exit fee. Repaying one day early saves one day's interest. **Is there a monthly fee as well?** No. The pricing is the daily rate plus a one-time £5 establishment fee per draw. No monthly administration fee, no annual renewal fee. **Why is the APR so high?** APR annualises and compounds the cost over 12 months. For a short bridge, the relevant figure is total cost of credit — the amount you actually pay in full. A 14-day advance at 0.25% per day has a total interest cost of 3.5% of the principal — that is the number that matters. **Does the Flex rate change on a partial repayment?** No. The rate stays at 0.25% per day. What changes is the balance it applies to — after a partial repayment, the daily charge falls because the outstanding principal is smaller. ## Where to go next - [Bridging Loan cost calculator](/tools/bridging-loan-cost/) — see the total cost for any amount and term. - [Flex facility cost calculator](/tools/flex-facility-cost/) — model a revolving draw, partial repayment and redraw. - [The 100% cost cap](/learn/the-100-percent-cost-cap/) — the hard ceiling on total cost, explained in full. - [A loan or a facility](/learn/a-loan-or-a-facility/) — the structural difference between a term loan and a revolving facility. - [The three products](/products/) — Business Bridging Loan, Credicorp Flex and Credicorp Slice. ## Borrow only what you need, only as long as you need it Daily interest means repaying early always costs less. No penalties. No fine print. When the right short-term need is in front of you, apply at [credicorp.co.uk](https://credicorp.co.uk/).