# Borrowing only what you need: a florist’s story *Source: https://credicorp.co.uk/borrowing-only-what-you-need-a-florists-story/* Not every enquiry should end in a loan, and not every loan should be for the amount first asked. This is the story of a small florist, run as a limited company, where the most useful thing we did was help the director borrow less than she planned, and look at a cheaper option first. *It is an anonymised, illustrative example. The business, the people and the figures are invented and the details have been changed to protect privacy, but the situation and our product are real, and the approach is exactly how we try to lend.* ## The plan she came with The florist is a limited company with one director and a part-time assistant. With Valentine’s week approaching, the director wanted to stock up generously: more flowers, more ready-made arrangements, and some extra sundries, to make the most of one of the year’s biggest weeks. She came to us intending to borrow at the upper end of what she thought she might need, to be on the safe side. That instinct is understandable. Peak weeks are stressful, and nobody wants to run out. But borrowing for headroom you may not use is an expensive way to buy peace of mind, and part of lending responsibly is saying so. ## What we looked at together When she applied, we reviewed the company’s bank-account history and recent trading, alongside a business credit check on the company and an identity check on her as director. Two things stood out. First, a good portion of what she wanted to buy could be covered by the company’s own takings in the days just before the peak, once early orders came in. Second, her flower wholesaler offered short trade terms that she had not fully used, which could cover part of the stock at no borrowing cost at all. So before talking about how much to lend, we talked about whether to lend that much at all. We pointed her to [alternatives to short-term lending](/support/alternatives-to-short-term-lending/) and to [when not to take a short-term business loan](/support/when-not-to-take-a-short-term-business-loan/), because the honest starting question is always whether borrowing is the right tool, and if so, how little will do the job. ## Borrowing less, on purpose Once she had used the wholesaler’s terms and accounted for the takings coming in just before the peak, the genuine gap was much smaller than she had first imagined. She borrowed a small, round amount within our published range of £50 to £500, over a short term timed to Valentine’s takings, and notably less than she had walked in expecting to take. That meant a smaller total cost to the company, because the amount and the term were both kept tight. We lend to the company, not to its director, and we take no personal guarantee. Before signing, she saw the amount borrowed, the term, the total amount payable and the full repayment schedule on the **Key Information Sheet (KIS)** and in the **Business Loan Agreement**. We do not quote a consumer APR and we invented no fee; the full cost was in front of her before she agreed. ## Why this is how we try to lend It might seem odd for a lender to talk a customer down to a smaller loan, but it is central to lending responsibly. A short-term loan is expensive compared with using your own cash or trade credit, and the right size for it is the smallest amount that genuinely solves the problem, over the shortest sensible term. Borrowing more than you need does not make a peak week safer; it just makes it costlier. Our job is to fund a real, short-term gap, not to maximise what you owe us. That is also why we are upfront that this lending is not covered by the Financial Ombudsman Service or the FSCS, and why we point readers who are unsure toward free, independent business advice, such as Business Debtline at [businessdebtline.org](https://businessdebtline.org) or 0800 197 6026, before they borrow anything at all. ## How it ended Valentine’s week traded strongly, the stock sold well, and the company repaid the smaller loan comfortably from its takings, on schedule. The director told us she was glad she had not borrowed the larger amount she first had in mind, because she would have paid more to hold stock she did not need. We count that as the best kind of outcome: the company got exactly the help it needed, and no more. If your company has a genuine short-term gap, our [business loans page](/business-loans/) sets out what we currently offer, and we would always rather help you borrow the right amount than the biggest one. --- Credicorp Limited — UK lender to limited companies (Company No. 16093826). credicorp.co.uk