The Business Purpose Declaration (BPD) is a short statement you sign confirming that the loan is for your company's business purposes — not for personal use. It is a legal requirement under the Consumer Credit Act 1974 for loans that fall outside consumer credit regulation.
Why it matters
Credicorp lends exclusively for business purposes. The BPD is what confirms this. By signing it, you confirm that:
- The borrower is acting in the course of a business.
- The credit is wholly or predominantly for a business purpose.
- You understand that the Consumer Credit Act's consumer protections do not apply to this borrowing.
When you complete it
The BPD appears at the end of the application, after you have reviewed your Key Information Sheet and signed the Loan Agreement. It is the final step before the loan is finalised.
What the declaration says
The wording is set by law and cannot be altered. It confirms that the loan is for business purposes. You may be asked to describe the business purpose in one or two sentences — for example: "The loan will fund a stock purchase for our retail business" or "The loan covers a gap in cash flow while waiting for a client invoice to settle."
Common mistakes to avoid
- Do not describe a personal purpose — e.g. "to pay my mortgage" or "to buy a personal car". If the purpose is personal, the loan is not appropriate for your situation and you should not proceed.
- Be specific — vague purposes like "working capital" are acceptable, but a brief explanation of what the working capital is for is better.
- Ensure the director signing has authority — only a director authorised to enter into contracts on the company's behalf should sign.
See also: How to understand your Credicorp Business Loan Agreement, How to read your Key Information Sheet, How to update your business bank account details.