Answer

Is taking on debt during a growth phase a risk?

Borrowing to fund proven demand is normal and often wise; the risk is over-borrowing against hoped-for growth that has not arrived. Fund what you can service today, not a forecast you cannot yet prove.

2 min read

Proven demandFund it

Hoped growthBe cautious

Service todayThe test

Good growth debt

Debt that buys stock, capacity or people to meet demand you can already see tends to pay for itself. The key test is whether current, evidenced cash flow can service it — run the affordability check on today’s numbers.

Where it turns risky

Borrowing heavily against growth that has not materialised leaves you with the repayment but not the revenue. Keep a buffer, grow in stages, and avoid stacking multiple facilities. A no-personal-guarantee loan keeps the risk with the company.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. Because there is no personal guarantee, ambitious but well-judged growth borrowing does not put your personal assets on the line. See business loans or apply online.

Frequently asked questions

Should I borrow to grow?

Borrowing against proven, evidenced demand is often sound. Borrowing against growth you only hope for is the risky version. Service it on today’s cash flow, not a forecast.

How do I keep growth debt safe?

Fund demand you can already see, keep a buffer, grow in stages, and avoid stacking facilities you cannot comfortably service.