Most business lenders are straightforward, but comparing offers is also a chance to spot the ones that are not. A few recurring warning signs are worth keeping in mind whoever you are talking to, including us.
Red flags in how an offer is presented
- Pressure to sign quickly before you have read the agreement.
- A rate quoted with no clear total of what you will repay.
- Fees that only appear late or are buried in the small print.
- Upfront payments demanded before any funds are advanced.
- Vagueness about who you are actually contracting with.
Red flags in the terms
- Penalties that make leaving early disproportionately costly.
- Personal guarantees presented as routine when you did not expect them.
- Unclear answers about what happens if you hit difficulty.
How to protect yourself
Ask for everything in writing, read the agreement in full, and never feel rushed. A genuine lender will give you time. Credicorp lends to the company, not to its directors, and does not take personal guarantees from directors. We will always set out your cost and term in your offer in writing. As an exempt business lender we sit outside the consumer-credit regime, so the Financial Ombudsman Service and FSCS do not apply, which makes reading the terms carefully all the more important.
See also: Comparing lenders on eligibility, not just price, How do I spot the early warning signs of cashflow trouble? and A simple framework for comparing business finance options.