2 min read
The tests that matter
Two measures tell the story: interest cover (profit versus interest — comfortably above 1 is healthy) and gearing (debt versus equity). Thin cover or high gearing means little margin for a bad patch.
A healthy level
There is no single number — it varies by sector and cash-flow stability — but the guiding rule is that repayments should stay comfortable even in a slow quarter. Keep a debt service cover cushion. Use the interest cover calculator.
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
What is a healthy debt level?
One the business services comfortably even in a downturn. Watch interest cover and gearing rather than an absolute figure, and keep a cushion above the repayments.
What are the signs of too much debt?
Thinning interest cover, rising gearing, repayments that only work in a good month, and reliance on new borrowing to service old debt. Any of these calls for caution.
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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.