Due diligence is the careful review carried out before a financial decision is made. In lending it works both ways: a lender does due diligence on a business before offering finance, and a sensible business does due diligence on a lender and an offer before accepting it.
What a lender checks
- That the company is who it says it is, including verifying its details.
- How the business trades and whether a facility is affordable.
- The company's credit profile and any signs of risk.
What you should check
Before accepting any finance, it pays to do your own due diligence. Read the agreement in full, understand the rate and terms shown in your offer, and make sure the repayments fit the company's cash flow. Ask questions about anything that is unclear.
- Is the total cost of borrowing clear?
- Do you understand what happens if you repay early or fall behind?
- Does the facility genuinely suit the need?
Credicorp lends only to UK limited companies and LLPs for business purposes. We aim to make our agreements clear so your own due diligence is straightforward. If anything is unclear, ask our team before you accept.
See also: What is a grace period?, What is underwriting?, What is a guarantor in business lending?.