2 min read
How they differ
A loan gives a lump sum repaid over a set term — good for a defined cost. An overdraft lets you dip below zero up to a limit, charging only on what you use — good for short, unpredictable gaps.
Which wins when
Choose a loan for equipment, a project or consolidating debt. Choose an overdraft (or a revolving facility) for smoothing the day-to-day. Living permanently in an overdraft signals a deeper issue. Read loan vs overdraft.
What it means for you
Right tool, right job.
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
Frequently asked questions
Is an overdraft cheaper than a loan?
Only if used lightly and briefly. Heavy or permanent overdraft use is expensive, and a dedicated facility or loan is usually better for a sustained need.
Can I have both?
Yes, subject to affordability. A loan for planned investment plus an overdraft for flexibility is a common, sensible setup.
Related reading
Business loan or credit facility: which is better?
A loan gives a lump sum for a known purpose; a credit facility gives reusable headroom you draw and repay as…
Read →
What does a business loan actually cost?
The real cost of a business loan is the total you repay minus what you borrowed — interest plus every fee —…
Read →
How much can my business borrow?
How much your business can borrow depends mainly on your turnover, trading history and what the repayments…
Read →
Business loan or overdraft — which is better?
A business loan gives your company a fixed lump sum with a defined repayment schedule, while an overdraft…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.