2 min read
What a cap does and does not do
A capped guarantee names a maximum figure. The catch is whether interest, default interest and enforcement costs count towards the cap or stack on top. Read the wording, because a “£50,000 cap” that excludes costs is not really £50,000. Model the true cost if a default occurs.
Negotiating the cap
Ask for an all-inclusive cap that captures interest and costs. Better still, borrow without a guarantee so there is no figure to negotiate.
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.
Frequently asked questions
Is a capped guarantee safe?
Safer than an uncapped one, but only if the cap includes interest and recovery costs. Otherwise your real exposure exceeds the headline cap.
How low can the cap go?
It is negotiable, but lenders set it against their risk. A no-personal-guarantee loan removes the negotiation entirely.
Related reading
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What is the difference between a guarantee and an indemnity?
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What is a personal guarantee and do I need one?
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Can a limited company borrow without a personal guarantee?
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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.