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What a 100% cost cap means.
A cost cap sets a hard ceiling on what borrowing can ever cost. Every Credicorp product carries a 100% cap: the total cost can never exceed the amount borrowed. This guide explains what the cap covers, why it protects a company borrower, and shows the arithmetic with illustrative worked numbers.
The cap, in one sentence
The cost of borrowing never overtakes the sum you borrowed.
A 100% cost cap means the total of everything you are charged to borrow — interest, fees, any late charges — can never exceed 100% of the amount borrowed. Borrow £400 and, whatever happens over the life of the borrowing, you can never be charged more than £400 in cost on top. The most you could ever repay is the £400 you took plus £400 in charges: £800, and not a penny more.
It is a ceiling, not a price. In practice, on a short product repaid on schedule, the cost lands far below the cap — a few pounds or tens of pounds. The cap is the backstop that fixes the worst case. It tells you the one number that can never be beaten, before you sign.
What the cap covers
The total cost of credit — not just the interest.
The 100% figure is measured against the cost of borrowing as a whole, not one component of it. On Credicorp's products that means:
- Interest — the 0.25% per day charged on the outstanding principal of a Business Bridging Loan or the drawn balance of Credicorp Flex.
- Establishment fee — the one-time £5 fee on the Loan, or on the first drawdown of Flex.
- The flat fee — the 6% charge on a Credicorp Slice bill.
- Late fees — for example the £12 per missed instalment on Slice, which is itself separately capped.
Add all of that together, and the running total can never pass 100% of the amount borrowed. Once the charges reach the amount borrowed, they stop. This matters most in the situations where short-term borrowing can otherwise run away: a missed payment, a delay, a balance left outstanding longer than planned. The cap is precisely the protection for those cases.
Worked numbers
Illustrative figures using the operator's published terms. The on-schedule cost is the realistic case; the cap is the worst case.
| Product | Amount borrowed | Typical cost, on schedule | Most cost can ever be (cap) | Most you could ever repay |
|---|---|---|---|---|
| Bridging Loan | £300 | £27.50 over 30 days | £300 | £600 |
| Bridging Loan | £500 | £80.00 over 60 days | £500 | £1,000 |
| Credicorp Flex | £200 drawn | £15.00 over 20 days | £200 | £400 |
| Credicorp Slice | £600 bill | £36.00 (6% flat fee) | £600 | £1,200 |
Read the last two columns as the ceiling, not the bill. On a £300 Bridging Loan repaid in 30 days the cost is about £27.50, roughly a tenth of the way to the cap. The cap exists for the day something goes wrong — not for the day everything goes right.
Interest on the Loan and Flex is 0.25% per day on the outstanding or drawn balance; the £5 establishment fee is one-time. Slice is a 6% flat fee with a £12 late fee per missed instalment (itself capped). Every product is capped so the total cost never exceeds 100% of the amount borrowed.
Why the cap protects a borrower
The danger with any short-term borrowing is not the cost when everything runs to plan — it is the cost when it does not. A balance left outstanding, a missed instalment, a delayed receipt: in the absence of a cap, charges on a small sum can compound until they dwarf the original amount. The 100% cap removes that tail risk entirely. The worst case is bounded, and it is bounded at a figure you can see before you borrow.
It also makes the borrowing easy to reason about. A director weighing up a £400 facility knows, with certainty, that the company's total exposure is at most £800 — never an open question, never a number that grows without limit. That certainty is part of why the company, not the director, is the borrower and why no personal guarantee is taken: the company's exposure is fixed and knowable. See personal guarantees explained for the related point.
A cap is a contractual protection the operator chooses to give. It is not a regulatory requirement here — body-corporate lending sits outside the FCA consumer-credit regime, as set out in lending and regulation. The protection comes from the product terms, not from the perimeter.
Where to go next
- Bridging-loan cost calculator — see the cash cost against the cap
- Flat fees versus APR — reading the cost of short-term borrowing
- The three Credicorp products — Loan, Flex and Slice in detail
- Lending and regulation — why this is body-corporate lending under Article 60B
- Glossary — plain-English definitions of the terms used here