Business Loan Calculator
Calculate business loan repayments, total interest, origination and admin fees, and the effective annual cost. Supports monthly, weekly and fortnightly repayment schedules with a full amortization table.
Enter the loan amount, interest rate, term and fees to calculate periodic repayments, total interest cost and effective annual cost. Full amortization schedule included.
Results are estimates only. Always confirm with your lender before committing.
Formula
Payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
P = principal · r = periodic rate (annual rate ÷ periods/year) · n = total periods. Each payment covers interest on the outstanding balance first; the remainder reduces principal.
Worked Example
$50,000 at 8.5% p.a. over 36 months, monthly repayments:
r = 8.5% ÷ 12 = 0.7083% / month · n = 36
Payment = $50,000 × [0.007083 × 1.007083^36] ÷ [1.007083^36 − 1] = $1,576.03
Total repaid = $1,576.03 × 36 = $56,737.08 · Interest = $6,737.08
Add 1% origination fee ($500) + $250 admin = $750 total fees. Full facility cost: $7,487.08 on $50,000 over 3 years.
Disclaimer
- Results are estimates for planning purposes only and do not constitute financial advice.
- Actual repayments, fees and rates vary by lender, jurisdiction and creditworthiness.
- Some lenders use flat-rate interest (not reducing balance), which produces different figures.
- Always confirm final terms with your lender or a qualified financial adviser before committing.
FAQ
Frequently Asked Questions
Use this in your workflow
Copy the repayment figure, then use the Margin Calculator to verify loan-funded growth still hits your margin target, or the Landed Cost Calculator to include finance costs in your import pricing. Back to Free Business Calculators.
Worked example: £50,000 SME term loan
A useful starting point before entering your own figures above.
| Item | Value |
|---|---|
| Loan amount | £50,000 |
| Annual interest rate | 8.5% |
| Term | 3 years (36 months) |
| Origination fee (1.5%) | £750 |
| Monthly repayment | £1,579 |
| Total interest paid | £6,844 |
| Total cost (loan + interest + fee) | £57,594 |
| Effective annual cost (inc. fee) | ~9.2% |
The origination fee of £750 raises the effective annual cost from 8.5% to ~9.2%. When comparing lenders, always compare the effective annual cost — not just the headline rate — to account for fee differences. A lender offering 8% with a 3% origination fee will cost more than a lender offering 8.5% with no fee on a short-term loan.
Limitations
This calculator uses the standard reducing-balance amortisation formula. Some equipment finance arrangements use flat-rate interest, which produces different (typically higher) total interest. Variable-rate loans will deviate from this estimate if the rate changes. These figures are for planning purposes only — always confirm the repayment schedule with your lender before committing. Not financial advice.
When to use this calculator
- →Comparing SME term loan offers from different lenders
- →Budgeting the monthly cash flow impact before taking a loan
- →Calculating the true total cost including origination and admin fees
- →Equipment finance, working capital and trade finance scenarios
Frequently asked questions
How do I calculate a business loan repayment?
Use the reducing-balance (amortisation) formula: Payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where P is the loan amount, r is the periodic interest rate (annual rate ÷ periods per year), and n is the total number of periods.
What is the difference between interest rate and effective annual cost?
The stated interest rate is used to calculate each periodic interest charge. Effective annual cost includes all fees expressed as an annualised percentage of the loan. It lets you compare loans with different fee structures on a like-for-like basis.
How do loan fees affect the total cost?
Origination fees (0.5%–3% of the loan), admin and documentation fees increase the total repayment and effective annual cost. This calculator shows total fees separately so you can see exactly how fees change the true cost of the facility.
Can I calculate weekly or fortnightly repayments?
Yes. Weekly and fortnightly repayments result in slightly more payments per year, meaning you pay down principal faster and pay marginally less total interest over the loan term compared to monthly.
What does the amortisation schedule show?
The amortisation table shows every repayment period with the payment split into interest charged and principal repaid, plus the outstanding balance after each payment.
Is this suitable for equipment finance?
Yes, for standard reducing-balance loans. Some equipment finance uses flat-rate interest (calculated on the original balance throughout), which produces higher total interest. Always confirm the basis with your lender.