How do I decide between borrowing and using

2 min read

Keep a bufferGolden rule

Small + safeUse savings

Would expose youBorrow instead

How to weigh it

Using company cash avoids interest, so for a small cost that still leaves a healthy reserve, savings often win. But if spending your reserve would leave nothing for a bad month, borrowing to preserve the buffer is the safer choice — even at a cost. The question is not just “what's cheapest?” but “what leaves the business resilient?”.

What this means for your company

Compare the interest saved by using cash against the risk of having no cushion. If the spend earns a strong return, borrowing and keeping your cash working elsewhere can beat depleting reserves — the return-on-borrowing calculator shows whether. Many directors split the difference: part-fund from savings, part from a facility, keeping the buffer intact.

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 it always cheaper to use savings?

On interest, yes — savings cost no interest. But 'cheaper' ignores risk. Draining your reserve to save interest can leave you exposed to a shock, which may cost far more than the interest you avoided.

How much of my reserve is safe to spend?

Keep enough to cover several months of fixed costs after the spend. If the purchase would take you below a comfortable buffer, borrow the difference rather than emptying the reserve entirely.