2 min read
The comparison
An early-payment discount has an annualised value that is often surprisingly high — a 2% discount for paying 20 days early is worth far more than 2% a year. If that beats your cost of finance, borrowing to take it makes money.
Run the numbers
Annualise the discount and compare it against the short-term finance cost of paying early. Use the early payment discount calculator to check before you decide.
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
Is a prompt-payment discount worth borrowing for?
Often, yes. Annualised, a small early-payment discount can be worth far more than the cost of short-term finance, so borrowing to take it can pay for itself.
How do I compare the discount and finance cost?
Annualise the discount using the days you would pay early, then compare it against the annual cost of the finance. If the discount is worth more, taking it pays.
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