A facility is described as being in arrears when one or more repayments that were due have not been paid on time. In short, the account has fallen behind the agreed repayment schedule.
How arrears arise
Arrears can happen for many reasons, from a missed payment date to a temporary cash-flow gap. The amount in arrears is the total of the payments that should have been made but have not been.
- It refers to overdue repayments, not the whole balance.
- Interest and the rest of the schedule generally continue alongside.
- Letting arrears build can affect the standing of the facility.
What to do
If your company is in arrears or expects to be, the most helpful step is to contact us as early as possible. Talking things through early usually gives more options than waiting, and we would always rather help find a workable way forward.
Credicorp lends only to UK limited companies and LLPs for business purposes and is an exempt business lender, so the Financial Ombudsman Service and FSCS do not apply. Any support available is discussed case by case and set out within the terms of your agreement.
See also: What happens if I miss a payment?, Asking for extra time or plain language on calls and What does 'arrears' mean and will it affect my credit file?.