Yes. When a significant customer fails to pay — enters administration, disputes an invoice, or simply goes dark — the hole it leaves in your working capital is immediate even if the recovery process drags on for months. A short-term business loan can plug that shortfall so you continue to pay suppliers, staff, and overheads while you pursue the debt or adjust your order book.
Why this situation arises
- A key customer enters administration with a large outstanding balance
- An invoice dispute freezes payment on a sum you had already committed to spend
- A long-running contract is unexpectedly terminated mid-cycle, removing forecast revenue
- Currency or commodity exposure leaves an expected payment materially short
How the finance works here
A Credicorp Business Loan provides a fixed lump sum to cover the identified shortfall over a fixed term. If the bad debt is partially recoverable — through an insurer, legal action, or an administrator's distribution — the repayment term can be set to allow for that recovery. Credicorp Flex can work if the shortfall is uncertain in size: draw only what you need as the picture becomes clearer, repay when cash comes in, and keep the line available.
Dealing with the root cause at the same time
Finance buys breathing room — it does not fix over-concentration in one customer. Use the period to diversify your debtor book, review your credit terms, and consider trade credit insurance. Demonstrating that plan to us at application strengthens the case and gives your repayment logic a sound basis.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Buying a competitor's assets with short-term business finance, Bridging a seasonal revenue gap with a business loan.