Business Loan Calculator
Estimate your business loan repayments, total interest and the overall cost of borrowing, including arrangement fees.
Outstanding Balance Over The Loan Term
Cost Breakdown
Year-By-Year Amortisation Summary
Business Loan Calculator
Our Business Loan Calculator helps you estimate repayments on a business loan, including the total interest you’ll pay and the overall cost of borrowing once arrangement fees are factored in. Enter your loan amount, interest rate, term and fee details to see a full repayment breakdown and year-by-year amortisation summary.
How to Use This Calculator
- Enter your loan amount – the amount you want to borrow.
- Enter the annual interest rate used for your repayment calculation – this should be the interest rate itself, not an APR figure. APR is a broader measure that can include arrangement fees and other borrowing costs on top of interest, so entering an APR instead of the interest rate may produce a different repayment schedule from your lender’s actual figures.
- Enter your loan term and choose whether it’s in years or months.
- Choose your repayment frequency – monthly or quarterly, whichever your lender offers.
- Optionally, enter an arrangement or setup fee and choose how it’s applied – added to your loan balance and repaid with interest, or deducted from the funds you receive.
- Click Calculate Repayments to see your results.
How Are Business Loan Repayments Calculated?
This calculator uses the standard reducing-balance (amortising) method used by most term loans. Each repayment is a fixed amount that covers that period’s interest first, with the remainder reducing the outstanding balance. As the balance falls, less of each repayment goes towards interest and more goes towards paying down the loan. For this estimate, the annual interest rate is divided evenly across the selected repayment frequency – this is an illustrative assumption for calculation purposes, and individual lenders may apply interest differently.
| Term | Meaning |
|---|---|
| Principal | The amount borrowed (plus any fee added to the loan balance) |
| Interest Rate | The annual rate charged, divided across your repayment frequency |
| Repayment | The fixed amount paid each period, covering interest and a portion of the principal |
| Amortisation | The gradual reduction of the loan balance as repayments are made |
Interest Rate vs APR
The interest rate is the cost of borrowing expressed as a percentage of the loan, applied to the outstanding balance. APR (Annual Percentage Rate) is a broader figure that can include certain fees alongside interest, giving a more complete picture of the total cost when comparing loans. This calculator uses the interest rate you enter – not an APR figure – to calculate repayments, and factors in any fee separately so you can see both figures. If you enter an APR instead of the interest rate, the repayment figures shown may not match your lender’s actual schedule.
Secured vs Unsecured Business Loans
- Unsecured business loans don’t require collateral, but tend to carry higher interest rates and lower borrowing limits, with approval based heavily on business and personal credit history.
- Secured business loans are backed by an asset such as property, equipment or invoices. They often allow larger amounts and lower rates, but the asset is at risk if repayments aren’t kept up.
What Fees Should I Expect?
- Arrangement or setup fees – a one-off charge for setting up the loan, sometimes a flat fee and sometimes a percentage of the loan amount.
- Early repayment charges – some lenders charge a fee if you repay the loan ahead of schedule.
- Late payment fees – charged if a repayment is missed or late.
- Broker fees – if you use a broker to source the loan, they may charge a separate fee.
Fees vary significantly between lenders and loan types – always check the full fee schedule before committing.
Does a Business Loan Affect My Credit Score?
Applying for a business loan can affect your personal and/or business credit score, particularly if the lender carries out a hard credit check, if you’ve provided a personal guarantee, or if repayments are missed. Many lenders offer an initial soft-search quote that doesn’t affect your credit score before you formally apply. Check with your lender how they assess applications and report to credit reference agencies.
Frequently Asked Questions
How is business loan interest calculated?
Most business loans use the reducing-balance (amortising) method: interest is calculated on the outstanding balance each period, and each fixed repayment covers that period’s interest first, with the rest reducing the principal. As the balance falls over time, the interest portion of each repayment shrinks and the principal portion grows.
What’s the difference between interest rate and APR?
The interest rate is the cost of borrowing applied to the outstanding balance. APR (Annual Percentage Rate) is a wider measure that can include certain fees alongside interest, intended to help you compare the total cost of different loans on a like-for-like basis. Always check whether a quoted figure is an interest rate or an APR before comparing lenders.
What’s the difference between secured and unsecured business loans?
Unsecured business loans don’t require collateral but typically carry higher interest rates and lower limits, with approval based on credit history. Secured business loans are backed by an asset such as property or equipment, often allowing larger amounts and lower rates, but the asset is at risk if repayments aren’t kept up.
What fees should I expect on a business loan?
Common fees include arrangement or setup fees, early repayment charges, late payment fees, and broker fees if you use one to source the loan. Fees vary significantly between lenders, so always check the full fee schedule alongside the interest rate before committing.
Does a business loan affect my credit score?
It can, particularly if the lender carries out a hard credit check, you’ve provided a personal guarantee, or repayments are missed. Many lenders offer a soft-search quote that doesn’t affect your credit score before you formally apply – check with your lender how they assess applications and report to credit reference agencies.
Is this calculator a loan offer?
No. This calculator provides an illustrative estimate based on the figures you enter, using the standard reducing-balance repayment method. It is not a loan offer, eligibility check or financial advice. Actual lender terms, APR, fees and credit assessment will vary, and approved rates depend on your business’s individual circumstances.