2 min read
What gearing shows
Gearing compares borrowed money with shareholders' equity. A highly geared business funds itself largely with debt, which magnifies returns in good times and losses in bad — and debt must be serviced regardless.
Why it matters for borrowing
Lenders watch gearing because it signals resilience. Moderate gearing shows a business that is not over-reliant on debt; high gearing means little cushion if trading dips. See how much debt is too much.
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
Is high gearing bad?
Not automatically, but it raises risk because debt must be serviced whatever happens. Moderate gearing is healthier; high gearing leaves little room for a setback and worries lenders.
How do I reduce gearing?
Retain profits to build equity, repay debt, or raise equity investment. Lower gearing strengthens resilience and your borrowing case.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.