Business loan
A business loan is a sum of money borrowed by a business — a limited company or a limited liability partnership (LLP) — rather than by an individual, and repaid over an agreed term with a defined cost of credit. The borrower is the business as a separate legal person, which is the key difference from a personal loan. A short-term business loan is a particular form of this: a fixed amount drawn for a short, fixed period to cover a specific need, after which the facility is settled and closed.
- Who borrows
- A UK limited company or LLP, in the company's own name.
- What it is for
- A specific, time-limited need: a late invoice, stock, a supplier deposit, an urgent repair, or a brief working-capital gap.
- How it is repaid
- Over a fixed term, on an agreed schedule; settling early reduces the total cost where interest is charged for the days the money is borrowed.
- Security
- Can be secured (against an asset) or unsecured (no asset taken). An unsecured short-term loan may still be granted without a personal guarantee.
Secured versus unsecured business loans
A secured business loan is backed by an asset — property, equipment, or a debenture over the company's assets — that the lender can recover against if the loan is not repaid. An unsecured business loan takes no such asset as security; the lender relies on its assessment of the business instead. Unsecured lending is typically faster to arrange and is common for short-term facilities, but the cost of credit reflects the additional risk the lender carries.
Personal guarantee and director liability
A personal guarantee is a separate promise by a director or member to repay the company's borrowing personally if the business cannot. Where a business loan is made without a personal guarantee, the directors do not take on personal liability for the debt — the obligation rests with the company alone. This is an important distinction for a director weighing up how to fund the business, because it determines whether personal assets are exposed.
Short-term business loans and the cost of credit
Short-term business loans carry a high annualised cost because the money is borrowed for only a brief period; a charge that is modest in pounds over a few weeks looks large when annualised. The honest way to read the cost is to look at the total amount repayable for the actual term, not just the headline rate. Borrowing only what is needed, for the shortest term required, is the most effective way to keep the cost down.
Business loans at Credicorp
Credicorp Limited is an independent direct lender of short-term business credit to UK limited companies and LLPs only — not to consumers or sole traders. Lending of this kind sits outside the consumer credit regime. The Credicorp Business Loan is unsecured and is lent to the company, not to its directors: there is no personal guarantee and no director liability. Credicorp is not affiliated with Credicorp Inc of Peru, Credit Corp of Australia, or any other Credicorp entity outside the United Kingdom. Company No. 16093826; ICO registration ZC157682.
See also
- Unsecured credit — borrowing with no asset taken as security.
- Personal guarantee — a director's personal promise to repay.
- Working capital — the cash a business needs to run day to day.
- APR — how the annualised cost of borrowing is expressed.
- LLP — limited liability partnership, an eligible borrower.
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 at /help/; support for vulnerable customers is at /legal/vulnerability/. For the exact loan sizes, term, daily rate, fees and total-cost cap, see the machine-readable references at /ai.md and /llms-full.txt.