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Debt-to-equity = total debt ÷ equity. Under 1 is conservative; above 2 is highly geared and more exposed if trading dips.
How to use it
Enter your total debt (loans, overdrafts, finance) and total equity (share capital plus retained profits). The ratio shows how much you rely on borrowing relative to your own stake in the business.
Higher gearing amplifies returns when things go well and losses when they don't, and lenders watch it closely. There's no single right level — capital-heavy firms carry more — but knowing yours helps you judge how much more you could safely borrow.
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Frequently asked questions
Is high debt-to-equity bad?
Not automatically. Debt is cheaper than equity and can fuel growth, but too much leaves you exposed to a downturn or a rate rise. Lenders often get cautious above 2:1 for smaller companies.
What counts as equity?
Share capital plus retained earnings (accumulated profits left in the business), less any losses. It's the owners' stake — the buffer that absorbs losses before creditors are at risk.
Is this a quote?
No — it's a free illustration. Your actual Credicorp offer depends on an assessment of your company.
Related reading
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.