Is it better to borrow a lump sum or draw in

2 min read

Draw as neededPay for what you use

Lump sumSimple but may idle

Match the needTime the draw

The cost of idle money

Take a lump sum and you pay interest on the whole amount from day one, even the part sitting unused. A facility you draw in stages charges only on the drawn balance, so timing the draw to the need cuts cost.

When a lump sum is right

For a single, defined cost you incur all at once — buying equipment, paying a bill — a lump-sum loan is simple and appropriate. For a phased or uncertain need, staged drawing is more efficient. Match the structure to how the money is spent.

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

Does drawing in stages save money?

Usually, on a facility, because you pay only on the drawn balance rather than a full lump sitting idle. For a single up-front cost, a lump sum is simpler and just as efficient.

When should I take a lump sum?

When you incur the cost all at once — equipment, a tax bill, a defined project. For phased or uncertain spending, a facility you draw in stages costs less.