Connor CampbellUse our free business loan calculator and find out how much it could cost you to meet your business goals or secure an injection of cash.
What is a business loan calculator?
A business loan calculator is a tool used to estimate how much a business loan may cost you. This is done by inputting the amount you want to borrow, your potential interest rate and the length of time you want to pay that sum back.
How does our business loan calculator work?
If you want to use our NerdWallet calculator to work out your monthly repayments, you can put in:
- the amount that you want to borrow in pounds
- the term, i.e. how long you want to take to pay back the loan
- the annual percentage rate (APR) you expect to pay
You can do this by clicking on each empty box and typing in your chosen details. You can then alter each number either by typing in a new one, or by clicking on the plus and minus buttons on either side of the input box.
Once you have your details in place, our business loan calculator will automatically provide you with the:
- predicted monthly cost of the loan, including interest
- predicted total interest you will pay
- predicted total cost of the loan, including interest
Meanwhile, if you want to calculate what you can afford to borrow, you will need to submit:
- how much you can afford to pay each month, in pounds
- how long you want to borrow for
- the APR you expect to pay
This will then show you:
- how much you can borrow overall
- the total amount of interest you will pay
- the total amount repayable, including interest
Why should I use a business loan calculator?
Using a business loan calculator can be a simple and effective way to gauge how much a loan may cost you.
A business loan calculator can give you an idea of how much the size of a loan, the interest rate, and the term length could affect the overall cost of borrowing.
And by assessing how each detail affects the cost per month, you will gain a better understanding of what you can realistically borrow.
What a business loan calculator will not provide you with is the exact interest rates and borrowing limits available to your individual business.
However, once you have an idea of what you may end up paying, you can more confidently move on to comparing business loans and starting your application. Doing this will then allow you to see how much borrowing will cost you specifically.
What is APR?
APR, or annual percentage rate, is used to reflect the total cost of borrowing over a 12 month period. It will include the interest rate, as well as any fees or charges associated with taking out the business loan. It can be used to more easily compare the cost of borrowing with different providers.
If you see a business loan advertised with ‘representative APR’, that means at least 51% of customers who have successfully applied for a loan have received that rate, or lower. However, it is important to stress that not everyone within that 51% will get the same rate.
How much can I borrow?
If you are looking to get a business loan, it may be wise to be guided by how much you can realistically afford to pay back on a monthly basis.
That is why using a business loan calculator can be useful, as it will provide you with initial guidance on how much your intended loan may cost and whether that monthly figure is affordable.
It is also helpful to have an idea of what may dictate your borrowing limit from the perspective of the lender, as it will allow you to better plan your finances. Potential factors include, but are not limited to:
- whether you are looking for an secured or unsecured business loan
- whether the loan is long-term or short-term
- the strength of your personal and business credit scores
- what industry you work in
- your revenue and income
- whether you have any business assets
- how much experience you have running your business
What affects my interest rate?
Much like the amount you can borrow with a business loan, the interest rate attached to that loan will be informed by a range of factors. This could include:
- how long you want to borrow for
- your credit history
- how long your business has been up and running
- your business revenue and income
- your business plan and cash flow forecasts
It is important to remember that a business loan calculator is meant to be a learning tool, and that any interest rate you input is speculative.
You will not know the exact interest rate available to you until you have applied for a business loan.
Business Loan Calculator FAQs
Yes, your business will need to be based in the UK to be eligible for most business loans.
Some lenders will require you to be the owner of a business in order to get a loan.
Some lenders may allow you to have a capital repayment holiday on your business loan.
A capital repayment holiday is where you freeze your loan repayments for a period of time. Interest will still be added over this period, and the overall term of your business loan will be extended by the length of the payment holiday.
Your credit score will not be affected by using an eligibility tool, as these checks are conducted through a soft search. This means lenders will not be able to see it on your credit report.
About the Author
Dive even deeper
9 Types of Business Loans
‘Business loan’ is a term that covers a wide range of financing options. From secured loans to invoice financing to working capital loans, find out more about the many sources of funding that could suit your business borrowing needs.
Rhiannon Philps
Duncan Ferris
How do Limited Company Business Loans Work?
Limited company loans offer a way for businesses to potentially get the funds they need to take their business to the next level. Loans between directors and their business are also possible, but keep a record and be aware of the tax implications.
Holly Bennett
A Quick Guide to Online Business Loans
Applying for an online business loan is now one of the most common ways your organisation can secure funding. You should make sure you go for a trusted lender and carefully compare your options before starting your application.