If there is any chance you will repay a facility ahead of schedule, the early-repayment terms can change the maths considerably. Two offers that look alike at the start can diverge sharply if your business is in a position to clear the balance sooner than planned.
The two broad approaches
- Cost tied to time borrowed: you pay for the period you actually use the money, so repaying early reduces the total.
- Cost fixed at the outset: the charge is set when you draw the funds, so repaying early may save little or nothing.
Questions to ask each lender
- If I repay early, does my total cost go down?
- Is there an early-settlement or exit fee?
- How is any saving calculated, and can you show me an example?
Why it matters for comparison
A facility that looks slightly more expensive on day one can end up cheaper if your business clears it early and the cost falls with time. The opposite is also true. Map your realistic repayment plans against each offer's early-repayment rules before you decide.
Your Credicorp terms
The early-repayment terms that apply to your Credicorp Flex or Credicorp Slice facility are set out in your agreement. Read that section carefully, and ask us if anything is unclear. Credicorp lends only to UK limited companies and LLPs for business purposes.
See also: Is there a penalty for repaying early?, What is early repayment?, Comparing lenders on eligibility, not just price.