“Responsible lending” is one of those phrases that gets used so often it can stop meaning anything. Every lender claims it. So I want to set down, plainly, what it actually means to me and how it shapes the way we run Credicorp. Not as a slogan, but as a set of things we do and things we refuse to do.
Speaking as Credicorp’s founder and managing director. The short version is this: responsible lending means only lending when borrowing is genuinely the right move for your company, being completely clear about the cost, turning you away when it is not right, and treating you well if things get difficult later. Here is what each of those means in practice.
Affordability comes first
Before we lend, we look at whether your company can realistically afford to repay. We assess the business, not the director’s personal income or any benefits they receive. We look at turnover, bank-account history and the company’s business credit file, and we ask a simple question: does the money coming in over the loan term comfortably cover the repayments alongside everything else the business has to pay?
If the answer is no, lending would not be a favour. It would be setting a company up to struggle. Affordability is not a box we tick; it is the whole basis of the decision.
Transparency, especially about cost
I will say it again because it matters: our product is expensive compared with a bank overdraft or a longer-term loan. Short, small and fast lending costs more. The responsible thing is not to hide that, but to show it clearly so you can decide with your eyes open.
We do not quote a consumer APR. Instead, before you sign, you see the amount borrowed, the term, the total amount payable, the total cost of credit, a simple annualised rate and the full repayment schedule, all set out on your Key Information Sheet (KIS) and in the Business Loan Agreement. No surprises, no charges that are not written down. You can see what is currently offered on our business loans page.
Saying no when borrowing is the wrong answer
This is the part that separates responsible lending from the rest. Sometimes the right thing to do is to decline, even when a company wants to borrow and we could say yes. If the gap a loan would bridge is really a long-term shortfall, a short-term loan will not fix it; it will only push the problem down the road and add cost. If cheaper or more suitable options exist, you should use those first.
I would genuinely rather you read when not to take a short-term business loan and decide against us than take money you should not. A sale that harms the customer is not a good sale. Turning the wrong borrowing away is not lost business; it is the business working as it should.
Helping when things get hard
Even good, careful companies hit trouble. A big customer goes under, a contract falls through, the market turns. When that happens, how a lender behaves tells you everything about it. Our promise is simple: tell us early, and we will work with you.
We have a clear process for this, set out in our hardship and forbearance process. Depending on the situation, that might mean a short payment arrangement, a brief freeze to give your company breathing space, or a hardship variation that changes the terms to make them affordable. We will never add a charge that is not already in your agreement, and we will not punish you for being honest about difficulty.
Because we lend to the company and take no personal guarantee from its director, our focus stays on helping the business recover rather than chasing an individual. And because this lending sits outside the consumer rules under Article 60B FSMA RAO 2001, with no recourse to the Financial Ombudsman Service or the FSCS, the way we treat people in trouble is not policed by anyone but us. That is exactly why I take it so seriously.
Held to our own standard
Responsible lending, to me, is not a marketing word. It is affordability assessed honestly, costs shown plainly, the discipline to say no, and real help when it is needed. We hold ourselves to that because no outside body does it for us, and because it is the only way I am willing to run this company.
