Credicorp

Due diligence

Due diligence is the careful set of checks a lender carries out to understand who it is lending to and the risk involved. It spans confirming that a business is genuine and active, identifying its directors and ultimate owners, screening for sanctions and politically exposed persons, and assessing the business's ability to repay. Done well, it protects both the lender and the borrower.

Identity checks: Confirming the company or LLP exists, often via Companies House, and verifying its directors.
Ownership checks: Identifying ultimate beneficial owners and people with significant control.
Risk screening: Sanctions, politically exposed persons, and adverse information.
Affordability: Assessing whether the borrowing is sensible for the business.

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Standard and enhanced due diligence

Most borrowers are subject to standard due diligence. Where the risk is higher — for example where an owner is a politically exposed person, or the structure is complex — enhanced due diligence applies, meaning deeper checks and closer scrutiny of the source of funds. The level is matched to the risk the relationship presents.

KYC Know your customer (KYC) is the process of identifying and verifying who a lender is dealing with — the business, its directors and its ultimate owners… AML Anti-money laundering (AML) is the set of laws and checks that require lenders to verify who they are dealing with and to report suspicious activity… Eligibility Eligibility is the set of published criteria a business must meet to be considered for a facility. Credicorp's criteria: a UK limited company or LLP… Responsible lending Responsible lending means lending only what a business can sensibly handle, being clear about cost, and supporting borrowers in difficulty. Credicorp… /legal/vulnerability/ How Credicorp, a UK business lender, supports customers going through a difficult time — vulnerability policy and support routes. Sanctions Sanctions are legal restrictions that prohibit dealing with certain named individuals, entities or regimes. Lenders screen borrowers against sanctions… Flat rate A flat rate charges interest on the original amount borrowed for the whole term, rather than on the reducing balance. It can look cheaper than it is… Exempt lending Exempt lending is credit that falls outside the UK consumer-credit regime. Lending to a body corporate — a limited company or LLP — is exempt under FSMA… Covenant A covenant is a promise or condition in a loan agreement that the borrower must keep. Breaching a covenant can be an event of default, even if payments… Interest Interest is the charge a lender makes for the use of borrowed money, usually expressed as a rate. On short-term business lending interest is often charged… Limited liability Limited liability means the owners of a company or LLP are not personally responsible for its debts beyond what they have agreed to contribute — their…

Why due diligence matters to a borrower

Due diligence is not just a hurdle. It is part of responsible lending: a lender that understands a business is better placed to lend appropriately and to support it if difficulty arises. Providing accurate information promptly helps a sound application move quickly, which is why clear, honest answers at the outset are in the borrower's interest too.

Due diligence and Credicorp

Credicorp carries out due diligence on the UK limited companies and LLPs it lends to — identity, ownership and risk checks — as part of meeting its anti-money-laundering obligations and lending responsibly. The published eligibility criteria set out what a business needs to qualify; the internal detail of how decisions are reached is not published. Credicorp is an independent UK lender, not affiliated with Credicorp Inc of Peru, Credit Corp of Australia, or any other Credicorp entity outside the United Kingdom (Company No. 16093826; ICO ZC157682).

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