What finance options do I have if a key person

2 min read

The situation

What finance options do I have if a key person falls ill. Unplanned events — whether emergencies, sudden cost increases, or unexpected opportunities — do not wait for your cash flow cycle. The immediate question is how to cover the cost without destabilising the rest of the business.

For UK limited companies, the challenge is responding quickly. Insurance claims can take weeks or months. Cost savings take time to materialise. But the bill or the opportunity is here now.

Your options

Short-term commercial loans can cover urgent costs within days. Credicorp, for example, offers loans from 7 to 84 days, with decisions made quickly based on your company's bank statements and trading history.

A revolving credit facility is useful if you want pre-approved access to funds for future unexpected costs. You set it up in advance and draw down only when needed, paying interest only on what you use.

If the situation involves an insurance claim, a short-term loan can bridge the gap between the event and the payout — you borrow now, repay when the insurer settles.

What to consider

The key question is whether the cost is genuinely urgent. If it is — equipment has failed, a key customer has defaulted, or a regulatory deadline is looming — then the cost of not acting is usually higher than the cost of borrowing.

Be honest about the repayment timeline. Borrow for the shortest period that makes sense, and make sure the repayment comes from a reliable source (not from the hoped-for resolution of the problem itself).

What this means for your company

Having a plan for unexpected costs — whether that is a pre-arranged facility or simply knowing which lender you would approach — reduces the panic when something goes wrong. Preparation is cheaper than desperation.

The practical step: review your business's most likely risk scenarios, estimate the cost of each, and decide in advance how you would cover them. Then get a quote so you know the numbers before you need them.

Frequently asked questions

Do I need a personal guarantee?

Not with all lenders. Credicorp lends to the company itself and does not require a personal guarantee. Other lenders may require one, particularly for larger amounts or longer terms. Always check before you apply.

What happens if I cannot repay on time?

Contact your lender as early as possible. Responsible lenders will discuss options such as a short extension or revised repayment plan. Late fees may apply, and persistent non-payment can affect your company's credit rating.

Will applying affect my credit score?

Some lenders run a soft credit check at the quote stage, which does not appear on your credit file. A hard search typically happens only when you formally accept an offer. Ask the lender which type of search they use before applying.