How do lenders decide if I can afford a loan?

2 min read

Free cashWhat the business generates

DSCR 1.25+Comfortable cover

Stress testCover under pressure

They start with cash they can see

Lenders work from verifiable cash: bank statements, filed accounts and open-banking data. They strip out one-offs and look at steady, repeatable cash flow — which is why tidy records matter so much.

Then they measure cover and stress it

They calculate the debt service cover ratio — cash available divided by repayments — and look for a cushion, often 1.25 or more. Then they stress-test it: could you still afford the loan if sales dropped? Read the affordability guide.

What it means for you

Strengthen your case by collecting overdue invoices, tidying records, and asking for a well-sized amount.

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

What DSCR do lenders want?

Often at least 1.25, meaning your cash comfortably exceeds the repayments. Below 1.0 tells a lender the business cannot currently service the debt from its cash.

Do lenders check my personal income?

For a company loan assessed on the business, no. Credicorp looks at the company's cash flow, not your personal finances — which differs from lenders requiring a personal guarantee.