2 min read
The calculation
Break-even units = fixed costs ÷ contribution per sale (price minus variable cost). It tells you the volume at which the business stops losing and starts making money. See the contribution margin.
How a loan changes it
Adding a loan repayment raises your fixed costs, which lifts the break-even point. That is fine if the borrowing generates enough extra contribution to more than cover it. Use the break-even with loan calculator.
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
Why does break-even matter?
It is the sales target below which you lose money. Knowing it lets you set realistic goals, price properly, and judge whether taking on a cost or a loan is affordable.
Does a loan raise my break-even?
Yes, because the repayment adds to fixed costs. That is worthwhile when the borrowing generates enough extra contribution to more than cover the higher break-even.
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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.