What is a credit limit and how is it set?

2 min read

The ceilingMax drawn

From tradingHow it's set

Can growWith the business

What it means

A credit limit caps how much you can have drawn on a revolving facility or card at once. You can draw, repay and redraw beneath it, paying interest only on the drawn balance. It is not a target to fill — an undrawn limit is standby liquidity that usually costs little to hold.

How it's set

Lenders base the limit on verified turnover (often via open banking), affordability and your track record. As trading strengthens and you use the facility well, the limit can be reviewed upward. Size the limit you actually need with the working-capital calculator rather than asking for the maximum — a limit matched to real need keeps costs and temptation down.

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

Should I ask for the highest limit I can get?

Not necessarily. Size the limit to your genuine peak need. A larger limit can help in emergencies, but it should reflect real requirements, not a temptation to over-borrow. You only pay for what you draw.

Can a credit limit be increased later?

Yes. As your turnover grows and you demonstrate reliable use, lenders will often review and raise the limit. Using a facility sensibly and repaying on time is the best way to earn a higher limit.