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Cash flow, not turnover, sets the limit
Lenders do not simply lend a flat percentage of turnover. What matters is serviceability: how much cash your company reliably has left over each month once wages, suppliers, rent, tax and any existing borrowing are paid. A repayment has to fit inside that surplus with room to spare, so a business with strong margins and steady receipts can support a larger facility than a higher-turnover business running on thin cash flow.
A useful way to frame it before you apply is to look at your average monthly net cash generation over the last six to twelve months, then ask what monthly repayment you could meet even in a quieter month. That figure, not the headline loan amount, is the real constraint.
Working it out for your company
Take a realistic monthly cash surplus, decide what share of it you are comfortable committing, and work back to a loan size over the term you have in mind. Leaving headroom matters: a facility sized to the very edge of affordability leaves nothing for a late-paying customer or an unexpected cost. It is usually wiser to borrow a little less over a slightly longer term than to maximise the amount and run the repayment tight. Our calculators can help you model repayments against different amounts and terms.
This is general information, not financial advice. Base any borrowing decision on your own up-to-date figures.
How Credicorp finance fits
Credicorp lends to the UK limited company and assesses the company's ability to repay from its trading, with no personal guarantee. A short-term business loan or revolving business credit facility is sized to sit comfortably within your cash flow rather than stretch it. You can apply online as a company.
Frequently asked questions
Is a business loan based on turnover or profit?
Neither on its own. Lenders look at affordability — the cash your company has left after its existing commitments. A business with strong margins and steady receipts can support more borrowing than a higher-turnover business with tight cash flow.
How do I know what repayment my business can afford?
Look at your average monthly net cash surplus over the last several months and decide what portion you could commit even in a quieter month. Size the loan so the repayment fits inside that with headroom to spare, rather than at the very edge.
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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.