Business loan calculator UK

• Monthly repayment — what leaves the company account each month.
• Total repayable — every payment added together, including the arrangement fee and, on interest-only, the capital repaid at the end.
• Cost of borrowing — total repayable minus the amount you received. This is the number to compare between offers.

A £50,000 facility over 36 months at 12% a year with a 3% arrangement fee works out at roughly £1,710 a month on capital and interest, around £61,500 repaid in total. The same amount on interest-only costs about £515 a month, but the £51,500 balance still has to be cleared at the end. Lower monthly payments are not the same as cheaper borrowing.

Interest-only commercial lending is common on bridging, property-backed facilities and some working capital lines. It protects monthly cash flow while a project completes, a property sells or a contract pays out. Lenders will want to see the exit: the sale, the refinance or the receipt that clears the capital.

Newer companies are usually looking at smaller amounts over shorter terms, often with a personal guarantee from a director. Set the amount between £5,000 and £25,000 and the term between 12 and 60 months for a realistic start-up illustration. Most commercial lenders we work with prefer at least 12 months of trading history.

Capital and interest, 12% a year, no arrangement fee. Use it as a sanity check before fine-tuning the calculator above.

Illustration only, not a quote. Real pricing varies by lender and product — see how UK business loan interest rates are set.

Lenders quote in different ways: an annual rate, a monthly rate, or a flat factor. A 1.2 factor on a 12-month facility is not 20% a year in the way an amortising 20% APR is, because you repay the balance as you go. Convert everything to total repayable in pounds before deciding.

• Whether the monthly repayment fits comfortably against average monthly turnover.
• Existing loans, facilities and any charges registered against the company.
• Seasonality — a repayment that works in December but not in February is a problem.
• The purpose of the funds and the return it is expected to generate.

The full picture is on business loan eligibility in the UK.

The same arithmetic works for an unsecured business loan, an asset finance agreement and a VAT or tax loan. For a merchant cash advance the repayment is a percentage of card takings rather than a fixed monthly figure, so use the merchant cash advance guide instead.

How are business loan repayments calculated?

Most UK term loans amortise: the monthly payment is fixed, each payment covers the interest accrued that month, and the remainder reduces the balance. Fees are usually added to the amount borrowed or deducted from the advance.

How does an interest only business loan calculator differ?

On an interest-only facility you pay the interest each month and repay the capital as a single balloon at the end of the term. Monthly payments are far lower, but total interest is higher because the balance never falls. Switch the repayment type above to compare the two side by side.

Can I use this as a start up business loan calculator?

Yes, the maths is the same for a start-up. In practice a new company is usually looking at a Start Up Loan or a personally guaranteed facility at a lower amount and a shorter term, so set a smaller amount and a 12 to 60 month term to get a realistic figure.

What rate should I assume for a commercial business loan?

UK commercial rates vary widely by product and risk. Secured and asset-backed lending sits at the lower end, short unsecured lending at the higher end. Use a range and compare the total repayable in pounds rather than the headline rate.

Is this calculator a quote?

No. It is an illustration only. Real pricing depends on the lender, the product, your trading history and any security offered. Backed is an independent introducer, not a lender.

The calculator shows the maths. Telling us what your company needs to fund takes about a minute, and, where appropriate, we pass your request to a funding partner. Backed is an independent introducer, not a lender.

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• How to get a business loan in the UK — What lenders look at, the funding types available, and how to apply.
• How business loans work in the UK — Terms, rates, repayments and personal guarantees explained.
• Commercial business loans in the UK — Business lending products, what lenders assess and how to compare offers.
• Business loans with bad credit — What is still fundable when the credit file is not clean.
• Invoice finance explained — Turning unpaid invoices into working capital.
• Merchant cash advance explained — Repaying from card takings, and when it makes sense.