2 min read
The temptation and the danger
Remortgaging or taking equity from your home to fund the business can look cheap — mortgage rates are low relative to some business borrowing. But it does something a company loan never should: it puts your home directly on the line for business risk. If the venture falters, your family home is exposed. That is a fundamentally different, and heavier, risk than borrowing that sits with the company. A company loan with no personal guarantee keeps the two worlds apart.
Cost versus risk
| Business loan (no PG) | Remortgaging your home | |
|---|---|---|
| What's at risk | Nothing personal | Your home |
| Rate | Higher | Lower (mortgage-priced) |
| Separation | Business and personal kept apart | Blurred — personal secures business |
| If the business fails | Limited to the company | Your home is exposed |
The lower mortgage rate is real, but it buys that saving with your home. For most directors, keeping the family home entirely out of business risk is worth paying a higher business rate. The limited-liability protection of a company exists precisely to avoid this exposure.
When personal borrowing is a red flag
If the only way to fund the business is to remortgage your home, that itself is a warning: it may mean the business cannot support the borrowing on its own merits. Borrow where the company stands behind the debt, not your home. See when not to borrow.
The Credicorp view
Credicorp lends to the company with no personal guarantee, so your home and personal assets are never on the line for the facility — the separation the company structure is meant to give you, preserved. Compare our business loans or register to apply. Educational content, not financial advice.
Frequently asked questions
Should I remortgage my home to fund my business?
Rarely. Remortgaging puts your family home directly on the line for business risk, which is a heavier and different exposure than company borrowing. The lower mortgage rate is real, but for most directors keeping the home entirely out of business risk is worth paying a higher business rate.
Isn't remortgaging cheaper than a business loan?
The rate is usually lower because it is secured on your home, but that is the problem: the saving is bought with your house. A company loan with no personal guarantee costs more but keeps your home and business risk separate — the protection the limited-liability structure is meant to provide.
What if I can only fund the business by remortgaging?
That itself is a warning sign. If the business cannot support borrowing on its own merits and only personal security makes it possible, the venture may not be able to service the debt. Borrow where the company stands behind it, and reconsider whether the funding is affordable at all.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.