A standing order is an instruction your business gives its own bank to pay a fixed amount to a named recipient on set dates. You control it from your side, and the amount stays the same unless you change it.
Standing order versus direct debit
The two are easy to confuse. With a standing order, the payer sets up and controls the payment. With a direct debit, the recipient requests the payment from your account under an agreed mandate, which can allow varying amounts.
- A standing order is set up and amended by the payer.
- It pays a fixed amount on a fixed schedule.
- A direct debit lets the recipient collect, sometimes varying, amounts.
Using it for loan repayments
Some businesses prefer a standing order because they keep direct control of the payment. The drawback is that if your repayment amount ever changes, you must update the order yourself, or a payment could be wrong.
Credicorp lends only to UK limited companies and LLPs for business purposes. The repayment method for your facility is set out in your agreement, so check there or ask our team before setting up any payment, to make sure it matches what is due.
See also: What is a settlement figure?, What is hire purchase?, What is a credit limit?.