Business Loan Repayment Calculator
Calculate monthly repayments, total interest cost, and effective APR for UK business loans. Supports capital & interest (amortising) and interest-only structures, with a full amortisation table and early repayment analysis.
Business Loan Repayment Calculator
Capital & interest or interest-only structure with amortisation table
The principal amount you wish to borrow
The headline annual interest rate quoted by the lender
Duration of the loan — between 1 and 120 months
Capital & interest: loan fully repaid at end. Interest only: balloon payment of full principal at end.
One-off fee charged by lender — increases effective APR
Penalty charged on outstanding balance if you repay early (0 = no ERC)
5 Business Loan Planning Tips
- Start Up Loans (government-backed): 6% fixed rate, up to £25,000 per director, no arrangement fees and no early repayment charges — ideal for new businesses under 36 months old.
- Recovery Loan Scheme: The CBILS successor provides a 70% government guarantee on loans up to £2M — making it easier for lenders to say yes, especially for businesses with limited assets.
- Invoice finance for cash flow gaps: If revenue is tied up in unpaid invoices, invoice finance (factoring or discounting) can release 80–90% of invoice value immediately — often cheaper than a term loan for short-term needs.
- Compare on APR, not rate: Arrangement fees significantly increase the effective APR, especially on shorter-term loans. Always use the total cost comparison, not the headline rate.
- Overdraft vs loan: Use a business overdraft for recurring short-term cash flow gaps (you only pay interest on what you use). Use a term loan for planned capital expenditure where you need a fixed repayment schedule.
Understanding Business Loan Costs
The true cost of a business loan is more than the headline interest rate. Arrangement fees, early repayment charges, and the structure of repayments (capital + interest vs interest-only) all affect the total amount you repay and the effective APR.
Capital & Interest vs Interest-Only
- Capital & interest (amortising): Each payment reduces the principal. The loan is fully repaid at the end of the term. Total interest is lower than interest-only.
- Interest-only: Monthly payments cover only interest. The full principal is repaid as a balloon at the end. Useful for cash flow, but total interest paid is higher.
FAQs
Does my credit score affect business loan rates?
Yes — lenders assess both your personal credit score (especially for sole traders and small limited companies) and your business credit history. A stronger credit profile typically unlocks lower rates and higher limits.
What is the difference between a loan and an overdraft?
A business loan provides a lump sum repaid over a fixed term — best for capital expenditure. An overdraft is a flexible revolving facility — best for managing short-term cash flow gaps. Overdraft interest is typically higher but you only pay for what you use.