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Business bridging loans explained.
A bridging loan is a short, fixed-term advance that covers a gap between money going out and money coming in. This guide explains what one is, when it fits a UK company, the exact terms Credicorp Limited lends on, and — just as importantly — where a bridge is the wrong tool.
What a business bridging loan is
A lump sum, lent for a defined period, repaid on a fixed schedule. The clue is in the name: it bridges a gap you can already see.
A business bridging loan is short-term credit advanced to a company as a single lump sum. You borrow a fixed amount, you repay it over a fixed term, and the cost is worked out on the amount still outstanding. It is not a facility you dip into and out of — that is a revolving facility, covered in our revolving credit facilities guide. A bridge is one advance for one purpose.
The defining feature is that the gap is visible before you borrow. You know the amount you are short, and you know the event that will close the gap — a confirmed contract, a stage payment due next month, a customer invoice with a date on it. A bridge buys you the time between now and then. Because the borrower is the company, not the director, this is body-corporate credit and sits outside the FCA consumer-credit regime; the detail of why is on our lending and regulation page.
When a bridge fits
The clean cases share one thing: a known shortfall now, and a known repayment source later.
- Buying stock against a confirmed order. A contract starts next month and you must pay for materials now. The order is the repayment source.
- Covering a stage-payment gap. You have completed a stage of work but cannot bill it for a few weeks, and a supplier wants paying first.
- Bridging a slow-paying invoice. A customer pays on 60-day terms; a smaller, faster bill falls due before their money lands.
- A one-off, time-limited cost. A single piece of equipment hire or a deposit that unlocks a larger return, repaid as soon as the return arrives.
In each of these, the term of the borrowing should match the length of the gap — no longer. A short-term loan held for longer than it is needed only adds cost. If you are unsure how the cost scales with the term, our bridging loan cost calculator lets you try the numbers before you apply.
The Credicorp Business Bridging Loan, in figures
These are the operator's published terms. Always confirm the live figures at the point of application — see credicorp.co.uk/business-loans.
| Term | Value |
|---|---|
| Amount | £50 – £500 |
| Term | 14 – 84 days |
| Interest | 0.25% per day on outstanding principal |
| Establishment fee | £5.00, one-time |
| Cost cap | 100% of principal |
| Repayment cadence | Weekly or fortnightly |
| Personal guarantee | None |
| Right to withdraw | 14 days from signing |
| Borrower | The company |
Two features are worth dwelling on. First, interest is charged on the outstanding principal, so repaying early reduces the cost. Second, the total cost is capped at 100% of the amount borrowed — whatever the rate and the term, you never repay more than double the principal in charges. The full product page sets out the cap and the cadence: credicorp.co.uk/business-loans.
Worked examples
Illustrations at the published rate, repaid on schedule. These are made-up examples, not real customers. Actual figures depend on the amount, the term and the timing of repayments.
| You take | Over | Interest | Fee | Total to repay |
|---|---|---|---|---|
| £300 | 30 days | £22.50 | £5.00 | £327.50 |
| £500 | 60 days | £75.00 | £5.00 | £580.00 |
| £200 | 14 days | £7.00 | £5.00 | £212.00 |
| £450 | 84 days | £94.50 | £5.00 | £549.50 |
Interest is 0.25% per day on the outstanding principal; the £5 establishment fee is one-time. The total cost is capped at 100% of the principal in every case. Worked here as if held for the full term and repaid in one sum; in practice, repaying earlier than the term shown reduces the interest.
Want to try your own figures? The bridging loan cost calculator runs the same maths for any amount and term.
Where a bridge does not fit
A bridge is a precise tool. Reaching for it in the wrong situation usually means there is a cheaper or better-shaped option.
- Funding a long-term purchase. Equipment, vehicles or fit-out costs that you will use for years should be matched to finance that runs over years. For an asset with a working life, asset finance is usually the better fit.
- Plugging an ongoing, recurring shortfall. If the gap returns every month, a one-off bridge only delays it. A revolving facility you can draw, repay and redraw fits a recurring need better.
- Replacing a structural cashflow problem. If the business is loss-making rather than merely timing-constrained, borrowing does not solve it. A bridge assumes a real repayment source.
- Paying a single supplier bill you would rather spread. Where the need is to pay one invoice over a plan, spreading the supplier bill with Credicorp Slice may suit better than a lump-sum loan.
The operator is candid that a short-term loan is not cheap relative to a business overdraft, a business credit card, or a longer-term SME loan, and lists alternatives it recommends checking first: credicorp.co.uk/business-loans. For a wider view of the choices, see our guide to invoice finance and the UK SME funding landscape.
How applying works
The brand site does not take applications. Everything below happens at credicorp.co.uk.
- Apply online with company details, a UK business bank account, photo ID and six months of business bank statements.
- A person reviews the file — Companies House verification, a business credit check, and an affordability check on the statements. No personal credit check on the director.
- Sign the agreement between Credicorp Limited and your company. No personal guarantee.
- Funds are released to your business bank account, usually the same working day if the agreement is signed before 3 pm UK time.
The full walkthrough is at credicorp.co.uk/how-it-works, and the operator's underwriting approach at credicorp.co.uk/how-we-lend.