I want to build a cash buffer — should I borrow to do it?

Borrowing to sit on cash rarely pays; a standby facility gives the same resilience without paying interest on money you're not using — resilience on tap, not idle debt. Borrowing a lump sum just to hold it in the bank means paying interest on money you're not using. It's an expensive way to feel secure.

I want to build a cash buffer — should I borrow

2 min read

Resilience wantedNot idle debt

Facility beats hoardOn tap, not held

No interest idlePay when used

The problem with borrowing to hoard

Borrowing a lump sum just to hold it in the bank means paying interest on money you're not using. It's an expensive way to feel secure.

A facility gives the same safety

A standby facility gives you resilience on tap without the cost of idle debt — you draw only when needed and pay only for what you use. It's the efficient version of a buffer.

Build real reserves from trade

Alongside a facility, build a genuine buffer from retained profit — our how-to on building a cash buffer shows a simple method. Owned reserves plus a facility is the strongest position.

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 when the numbers work.

Frequently asked questions

Should I borrow to build a cash buffer?

Rarely — paying interest to hold idle cash is expensive. A standby facility gives the same resilience without the cost, and you draw on it only when you actually need it.

What's better than borrowing for a cash reserve?

A standby facility for resilience on tap, plus a genuine buffer built from retained profit. Together they give security without paying interest on money you're not using.