2 min read
Why they draw scrutiny
Sales to a connected company, a director’s loan, or rent paid to an owner can make figures look better or worse than the underlying trade. In underwriting, a lender adjusts for these to see the real, sustainable performance.
Getting it right
Keep related-party dealings on arm’s-length terms, document them, and disclose them in the accounts. Clean, transparent figures build trust and a cleaner affordability view. Hidden related-party support is a red flag.
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
Are related-party transactions allowed?
Yes, if properly authorised, on arm’s-length terms and disclosed. It is undisclosed or non-commercial ones that raise concern.
Why do lenders adjust for them?
Because they can inflate or deflate the accounts. Lenders strip out the distortion to judge the sustainable, underlying performance.
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