If you take a Credicorp loan, the borrower on the agreement is your company. The director signing is acting as an authorised representative of the company. The director is not personally borrowing and not personally guaranteeing the debt. This article explains what that means in practice — and what it does not mean.
What it means
- No personal guarantee. If the company cannot repay, we cannot pursue the director personally for the balance. The agreement does not give us that right.
- No effect on the director’s personal credit file. We report the company’s facility conduct to business credit reference agencies (Experian Business, Creditsafe, Equifax Business). We do not report to the consumer-credit CRAs (the ones that build your personal credit file).
- The lending is outside FCA consumer-credit regulation. Because the borrower is a body corporate, the agreement falls outside Articles 60B and 60L of the FSMA RAO 2001. The Financial Ombudsman Service does not consider complaints about it. The Financial Services Compensation Scheme does not cover it.
What it does not mean
- The director is still bound by the duties owed to the company under the Companies Act 2006 — including the duty to take on borrowing only where it is in the company’s interest.
- If a director knowingly takes a loan in the company’s name while intending to dissolve the company without repaying, that could be fraudulent trading under section 213 of the Insolvency Act 1986 — and the director could be personally liable for that, separately from the loan itself.
- If the loan is taken with a personal-guarantee side document (we do not offer this on the standard Credicorp facility, but some brokers may discuss it), the personal guarantee can be enforced against the director.
Why we structure it this way
Two reasons. First, it matches how the company is actually trading — the borrowing is to fund the company’s operations and is repaid from the company’s income. Second, it places the credit decision squarely on the company’s affordability rather than on the director’s personal balance sheet, which is the right place to make it. A director’s personal wealth is not the company’s problem and should not be a backstop for the company’s borrowing.
Where to read more
The legal framing sits in our Regulatory Status notice. The agreement clause on the director’s role is clause 1.4 of the Business Loan Agreement template. Independent business-debt advice is available from Business Debtline (0800 197 6026).
