When is the right time to borrow for my business?

2 min read

Funds a returnGood timing

Bridges a gapAlso good

Plugs a lossWrong timing

When it makes sense

Borrowing is well-timed when the money earns more than it costs — a new contract, extra stock for a confirmed order, equipment that lifts output. Check the return beats the cost with the return-on-borrowing calculator. It is also sensible to bridge a genuine, evidenced short-term cash-flow gap while you wait on customer payments.

When to wait

Borrowing to cover an ongoing loss, or to service existing debt, is the wrong moment — it delays a problem that needs advice, not more debt. If you cannot yet show the return or the gap is structural, wait, fix the underlying issue, and revisit. A cash-flow forecast usually makes the timing obvious.

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

Should I borrow before I strictly need to?

Arranging a facility before a gap bites can be prudent — it is easier to secure finance when trading is healthy than when you're desperate. But only draw it for a real purpose, not just because it's available.

Is it wrong to borrow during a downturn?

Not if it bridges a genuine, temporary gap you can evidence a way out of. It is wrong if it merely funds continuing losses. The test is whether there's a realistic path to repay, not the state of the economy.