When comparing business finance, it is tempting to fix on a single rate. A more useful question is: how much will this agreement cost in total over its life? The total cost of credit is the figure that tells you that, and it is the one worth focusing on.
What goes into the total cost
The total cost of credit brings together everything you pay beyond the amount you borrow. Depending on the agreement that can include interest accrued and any applicable charges. Your own documents set out exactly which of these apply to you and what they add up to. We do not quote figures here because only your offer carries the numbers that bind.
Why it beats a single rate
- A headline rate alone does not tell you the cash you will part with.
- Two agreements with different structures can be compared honestly on total payable.
- It reflects the term, not just the price per period.
Where to find your numbers
Before you sign, your Key Information Sheet and offer set out the total amount payable in clear terms. Read that figure, sit with it, and ask whether your trading can comfortably support it. With Credicorp Flex, the way cost accrues depends on how you draw against the arrangement, so your statements show what you have actually incurred.
The honest test is simple: if you cannot see the full cost of an agreement before signing, do not sign it. You always should be able to with us.
See also: Where to find the cost of credit before you sign, Daily interest vs APR: which is the honest comparison?, Glossary: total cost of credit.