Do I need a deposit for a business loan?

Why working capital needs no deposit

A deposit makes sense when you are buying a specific asset and the lender wants you to share the cost and the risk — pay 10 or 20 per cent yourself, borrow the rest, and the asset secures the debt. Short-term working-capital finance works differently. It advances cash against your company's revenue to bridge a gap or fund stock, so there is no purchase to deposit against and nothing for the money to be secured on. You receive the funds and repay them from trading.

Where a deposit genuinely applies

Down-payments belong to a different family of products. Asset finance — hire purchase or a lease on vehicles, machinery or equipment — typically asks for a deposit because the asset itself is the security. Commercial property lending does the same. If your need is one of those, expect a contribution up front. If your need is cash flow, you are in unsecured territory and the question does not arise. The secured versus unsecured guide explains the split.

How Credicorp lends

Credicorp provides unsecured working-capital finance to UK limited companies, so there is no deposit, no asset to pledge and no down-payment. The facility is lent to the company on its trading and cash flow, with no personal guarantee from the director. Your own money stays in the business doing its job, rather than being tied up as a contribution. If you are weighing the cost of borrowing against keeping cash free, the true cost of borrowing calculator helps you compare.