A supplier offered a discount for paying early — should I borrow to take it?

An early-payment discount is often worth borrowing for, because the annualised saving usually beats short-term finance costs — but check the numbers, not the headline. A 2% discount for paying 30 days early is worth far more than 2% a year once annualised. Financing to capture it can be a genuine profit lever rather than a cost.

A supplier offered a discount for paying early

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Annualise itCompare like for like

Discount vs costOften a clear win

Short bridgeRepay quickly

Why early-payment discounts are powerful

A 2% discount for paying 30 days early is worth far more than 2% a year once annualised. Financing to capture it can be a genuine profit lever rather than a cost.

Do the comparison properly

Convert the discount to an annual rate and set it against your finance cost using the true-cost-of-borrowing calculator. If the discount wins, taking it with a short facility makes money.

Fund it cleanly

A short working-capital facility bridges the early payment until your own customers pay. Repay it inside the normal working-capital cycle.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online when the numbers work.

Frequently asked questions

Is a 2% early-payment discount really worth borrowing for?

Often yes. Paying 30 days early for 2% annualises to roughly 24% — well above typical short-term finance costs. The maths usually favours taking it.

What's the risk in borrowing to pay suppliers early?

Only that you over-commit cash you need elsewhere. Take the discount when the saving clearly beats the finance cost and you can repay within the trading cycle.