A payment holiday is a temporary, agreed arrangement to pause or reduce a company's loan repayments for a set period. It is not a cancellation of the debt; the amount owed remains, and interest usually continues to accrue.
How it tends to work
Because repayments are paused rather than written off, the loan is effectively repaid over a longer overall period, or repayments may be slightly higher once the pause ends. The exact effect depends on your agreement.
- A payment holiday must be agreed in advance; it is never something to simply stop paying without contact.
- Interest typically continues to build during the pause.
- The arrangement and any conditions are confirmed in writing.
When to ask
If your company is facing a short-term cash-flow squeeze, it is far better to contact us early than to miss repayments. We can discuss whether a payment holiday or another arrangement is suitable for your situation.
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 set out in your agreement and discussed case by case with our team.
See also: Can my company request a payment holiday?, What happens when payments resume after a pause? and What is a fixed interest rate?.