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The rate is not the cost.
Two offers can advertise the same headline rate and cost wildly different amounts. The number that matters is what leaves your account by the end — and getting to it means reading four things together, not one in isolation.
Four numbers, not one
Every finance offer is really four numbers wearing one label. To compare fairly, look at all four at once:
- The rate — the headline cost of the money, but only part of the picture and easily quoted in ways that are not comparable.
- The fees — arrangement, drawdown or admin charges that add to the cost without touching the rate.
- The term — how long you hold the money. A longer term can lower each payment while raising the total you pay.
- The total repayable — every payment and fee added up. This is the number that actually leaves your business.
Miss any one of these and two offers stop being comparable. A lower rate with a hefty arrangement fee can cost more than a higher rate with none. A smaller monthly payment over a longer term can quietly cost more overall.
A simple, illustrative example
The figures below are made up to show the method — they are not a quote and not anyone's real pricing. Always confirm actual numbers on the lender.
| Illustrative offer | Headline rate | Fees | Total repayable |
|---|---|---|---|
| Offer A | Lower | Large arrangement fee | Higher overall |
| Offer B | Slightly higher | No fee | Lower overall |
The "cheaper-looking" rate on Offer A is the more expensive deal once the fee is counted. That reversal is exactly why the rate alone can mislead — and why total repayable is the honest yardstick.
Match the cost to the value, and the term to the job
Cost is only half the judgement; the other half is what the money earns you. Borrowing to secure an order that clears well above its financing cost is a good trade even at a higher rate. Borrowing at a bargain rate for something that returns nothing is still money lost.
And keep the term honest to the purpose. Financing a short-lived, one-off need over a long stretch drags cost out for no benefit; the term should roughly track how long the thing you bought actually earns.
Questions to ask any lender
- What is the total amount repayable over the full term?
- Are there any fees beyond the rate — and are they one-off or ongoing?
- What happens if I repay early — is there a charge, or a saving?
- Is the rate fixed for the term, or can it move?
Good business lending answers all four plainly and up front. On credicorp.co.uk the real, current figures are laid out for each product — this note just helps you read them with a clear eye.
See the real figures
The actual numbers live on the lender
This note keeps to method, not pricing. For real amounts, rates, fees and total repayable — kept current — read each product on credicorp.co.uk, or compare the three side by side.