How do I build a financial buffer for my business?

2 min read

Target1–3 months of costs

MethodSet aside a share

StandbyFacility backs it up

Building the reserve

Decide a target — often one to three months of fixed costs — and move a fixed percentage of each month’s income into a separate account. Faster invoicing and tighter credit control free up the cash to do it. See how to build a cash buffer.

Backing it with a facility

Holding months of idle cash has a cost. A pre-arranged facility can sit behind a smaller buffer, giving you headroom on demand without tying up capital. With no personal guarantee, that safety net carries no personal risk.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. A standby Credicorp facility gives you a shock-absorber without a personal guarantee. See business loans or apply online.

Frequently asked questions

How big should my cash buffer be?

A common target is one to three months of fixed costs, scaled to how volatile your income is. More seasonal or lumpy revenue argues for a larger reserve.

Is a facility as good as cash in the bank?

A pre-arranged facility gives on-demand headroom without the drag of idle cash, and pairs well with a smaller reserve. Together they are a strong safety net.