2 min read
What it means
A balance sheet lists assets (what the company owns), liabilities (what it owes) and equity (the owners' stake). It always balances because equity is defined as assets minus liabilities. Unlike the profit and loss account, which covers a period, the balance sheet is a snapshot on one date — usually the year end.
Why it matters for your company
Lenders read the balance sheet for gearing, liquidity and reserves — the buffer to survive a bad month. Directors should read it too: it shows retained profit, directors' loan balances and whether the company is quietly building or eroding value. Keep it current in your management accounts, not just at year end.
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
What is the difference between a balance sheet and a profit and loss account?
The profit and loss account shows income and costs over a period (a year, a month). The balance sheet shows the financial position at a single moment. You need both to understand a company.
Do lenders always ask for a balance sheet?
For traditional lending, usually yes. Credicorp leans more on bank-verified turnover and cash flow, so a lean or new balance sheet is less of a barrier than with a high-street bank.
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