Credicorp

Recovery

Recovery is the process by which a lender seeks to collect a debt that has not been repaid, typically after an account has fallen into default. It can range from continued contact and a structured repayment plan, through to formal demand and, in the last resort, legal action. For a responsible lender, recovery is the path of last resort, not the first response to difficulty.

What it is: Action to collect an unpaid debt, usually after default.
When it arises: After arrears harden into a default and other options are exhausted.
The better alternative: An agreed arrangement reached by talking early.

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Recovery as a last resort

A lender that engages early can almost always find a better outcome than recovery. Forbearance — reduced or paused payments, a term extension, a structured catch-up plan — keeps a business trading and repaying, which serves both sides better than enforcement. Recovery becomes relevant only when those options have been exhausted or the borrower does not engage.

/legal/vulnerability/ How Credicorp, a UK business lender, supports customers going through a difficult time — vulnerability policy and support routes. Default A default is a breach of a credit agreement — most often missed payments — that a lender formally records once the breach reaches a defined threshold… Forbearance Forbearance is the temporary arrangements a lender offers a borrower in financial difficulty — such as reduced or paused payments — to help them recover… Arrears Arrears are payments that a borrower has missed and not yet made up — money that is overdue under a credit agreement but has not yet reached the threshold… Director liability Director liability is the question of when a company director can be held personally responsible for the company's debts. As a rule directors are not… UBO (ultimate beneficial owner) An ultimate beneficial owner is the individual who ultimately owns or controls a company — typically anyone holding more than 25% — identified and… CRA (credit reference agency) A credit reference agency holds credit information and shares it with lenders. For UK business lending the main agencies are Experian, Equifax and… Collateral Collateral is an asset a borrower pledges to a lender as security for a loan. If the loan is not repaid, the lender can recover against the collateral.… Invoice finance Invoice finance lets a business raise funds against its unpaid invoices, releasing cash tied up in receivables before customers pay. It includes invoice… SAR (Suspicious Activity Report) A Suspicious Activity Report is the report a regulated business files when it suspects activity involves the proceeds of crime or money laundering, under…

Recovery and the company

Where a lender has lent to a company without a personal guarantee, recovery is against the company, not its directors personally. This is a consequence of limited liability: the debt is the company's. A personal guarantee would change that for the guaranteed amount, which is one reason the presence or absence of a guarantee matters so much.

Recovery and Credicorp

Credicorp treats recovery as a last resort and would far rather agree a workable arrangement with a business in difficulty. Because we lend to the company with no personal guarantee, recovery is against the business, not its directors. If repayment is becoming difficult, contact us early at /help/; support for vulnerable customers is at /legal/vulnerability/. 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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