What happens on the first repayment date?

2 min read

~1 month afterFirst collection timing

Possible adjustmentPart-period interest

Direct debitUsual method

Fund the accountReady in advance

When the first payment lands

Most business loans take the first payment roughly a month after the funds are drawn, on the collection date set in your agreement. The exact gap depends on the lender and on how your chosen payment date falls relative to drawdown. Check the agreement for the precise first-payment date rather than assuming, so the money is in the account when the direct debit runs.

Why the first payment can be a different size

If there is a gap between the drawdown date and your regular monthly payment date, the lender may charge interest for that part-period and add it to the first payment, making it slightly larger than the standard monthly amount. This is normal and disclosed in the agreement. From the second payment onward, the amount settles to the level figure on your schedule.

Being ready for it

Make sure the collection account is funded ahead of the first date — a failed first payment starts the relationship badly and can trigger a returned-payment fee. If the first date does not suit your cash cycle, ask before drawdown whether it can be moved; it is easier to set the right date at the start than to change it later. See changing your payment date.

Confirm the first-payment amount and date against your repayment schedule, and plan the account balance around it. Ready to start? Apply.

Frequently asked questions

Why is my first payment bigger than the rest?

Almost always because it includes interest for the part-period between when you drew the funds and your first regular payment date. That extra bit of interest is added to the first collection, so it is slightly larger; every payment after it should match the level figure on your schedule. If the first payment is larger for any other reason, query it.

Can I delay the first payment if cash is tight at drawdown?

Sometimes — a few lenders offer a short initial deferral or let you set a later first-payment date. Arrange it before drawdown, not after. Bear in mind interest usually still accrues during any deferral, so the delay eases timing rather than reducing cost. If cash is tight at the very start, that is worth flagging to the lender early.