In the age of information, having a reliable tool to simplify complex calculations is invaluable. Our business loan calculator is straightforward to use, yet it provides comprehensive insights. Here's a step-by-step guide to harnessing its power:
Loan Amount
Start by entering the principal amount you intend to borrow. This is the core sum of money you need, excluding any interest or additional fees.
Interest Rate
Input the interest rate offered by your lender. This rate is usually presented as an annual figure and represents the cost of borrowing the principal loan amount.
Establishment Fees
These are the charges that may be levied by a lender to cover the costs of processing your loan application. Input any associated fees into the calculator to ensure they're factored into the final calculations.
Loan Term
Specify the duration for which you're borrowing the money. Whether it's a short-term boost or a longer commitment, inputting the correct loan term ensures you understand the lifespan of your repayments.
To estimate your monthly repayments and the total cost of the loan, input the loan amount, loan term and interest rate into the calculator below. This helps you plan your budget and choose the most suitable loan terms.
Every entrepreneur's journey is unique, and so are their financial needs. Our business loan calculator is designed not just as a tool but as an ally in your financial voyage. Here's how it can assist you:
Clarity
Get a clear picture of potential repayments, eliminating guesswork and giving you confidence in your financial planning.
Budgeting
By understanding your repayment structure, you can budget more effectively, ensuring your business runs smoothly.
Strategic Planning
With insights into how different loan amounts or terms might impact your repayments, you can make strategic choices about borrowing and repayment schedules.
Peace of Mind
There's comfort in knowledge. Knowing how your loan will impact your finances reduces uncertainty and stress, letting you focus on what you do best—growing your business.
Understanding the calculations behind your loan repayments empowers you to make informed choices, ensuring your business's financial health. While the loan amount, interest rate, establishment fees, and term are essential inputs, other nuanced factors influence the overall repayment structure. Let's dive into these:
Credit History
Your credit score and financial history play pivotal roles in determining the interest rate you're offered. A strong credit history might lead to more favourable rates, while a lower score could mean slightly higher rates, affecting the total repayment amount.
Business History
Lenders often assess the longevity and past performance of your business. A longstanding company with a solid financial track record may receive better terms compared to a startup, given its perceived lower risk.
Industry
Certain industries may be deemed riskier than others due to market volatility, seasonality, or other factors. Your business's industry can influence loan terms and, consequently, your repayment structure.
Security
If you're opting for a secured loan – where you offer collateral such as property or equipment – you might benefit from a lower interest rate. This is because the lender has an added layer of security, reducing their risk.
Loan Amount and Term
While these are direct inputs in the calculator, it's vital to understand their interplay. A larger loan amount or a longer term could mean more interest paid over the life of the loan, affecting your monthly and overall repayments.
Your Application
Other elements of your application, such as your business plan, cash flow projections, and current financial statements, can sway a lender's decision on terms and rates. Ensuring these are well-prepared can position you for better loan conditions.
Learn about eligibility and how to apply.
Every entrepreneur knows the significance of optimising costs. Your loan strategy shouldn't be any different. With our business loan calculator, you're not just gaining insights into potential repayments; you're also discovering opportunities to maximize your savings. Here's how you can leverage the calculator to ensure you get the best bang for your buck:
Reduce Repayments
By tweaking loan amounts or selecting different terms, you can observe how monthly repayments shift. This can be invaluable when budgeting, ensuring you're not overextending your business's finances.
Reduce Your Loan Term
A shorter loan term often means paying less interest over the life of the loan. Experiment with the term input to see how much you could save by paying off your loan quicker. This might mean higher monthly repayments, but the total interest savings can be substantial.
Compare Your Loan Options with Expert Assistance
Every loan offer is unique, just as every business has its own set of needs. But with over 40 lenders in our portfolio, we stand in a prime position to find you the best match. Use the calculator as a starting point to understand your potential repayments across various scenarios. Then, lean on our expertise to navigate the intricacies of each offer. We'll assist you in comparing interest rates, fees, terms, and more, ensuring that you secure the most advantageous deal tailored to your business's unique requirements.
Alter Your Repayment Frequency
While monthly repayments are standard, some lenders may offer weekly or fortnightly options. By adjusting the repayment frequency, you might find a schedule that aligns better with your cash flow while potentially reducing interest costs.
Navigating the lending world can sometimes feel like venturing into a vast ocean, with numerous options and terms floating around. To help you sail smoothly, here's a brief overview of the different business loan types, ensuring you can anchor down the best-suited option for your enterprise:
Term Loans
What it is: A straightforward loan where you borrow a lump sum of money and repay it, with interest, over a specified period. Best for: Businesses looking for a one-time influx of capital, whether for expansion, capital expenditure, or other significant investments.
Unsecured Business Loans
What it is: Unsecured business loans are based purely on the borrower's creditworthiness and the financial health of the business. They often come with a higher interest rate due to the increased risk taken on by the lender. Best for: Businesses that don't have significant assets to offer as collateral or those looking for quicker approval processes.
Lines of Credit
What it is: Similar to a credit card, a business line of credit provides you with a revolving credit limit. You can draw funds up to that limit, and you'll only pay interest on the amount you've used. Best for: Businesses seeking flexibility for managing cash flow, handling unexpected expenses, or financing short-term needs.
Merchant Cash Advances (MCA)
What it is: With an MCA, you receive an upfront sum of money in exchange for a percentage of your future credit card sales. Repayments are usually daily or weekly and fluctuate based on your sales volume. Best for: Businesses with significant credit card transactions, such as restaurants or retail stores, needing quick access to cash without the stringent requirements of traditional loans.
Equipment Financing
What it is: Loans specifically designed for purchasing equipment. The equipment itself often serves as collateral, securing the loan. Best for: Businesses looking to upgrade or acquire new equipment without tying up their working capital.
Invoice Factoring
What it is: Businesses sell their outstanding invoices to a third party (a factor) at a discount. This provides immediate cash flow, while the factor takes responsibility for collecting the invoice amount. Best for: Businesses with slow-paying customers or those looking to improve cash flow without incurring debt.
Compare over 40+ lenders with one application.
Venturing into the world of loans can sometimes feel like stepping into a classroom where everyone but you speaks a different language. To ensure you're not just nodding along but truly understanding, we've put together a glossary of common loan terms. Let's demystify the jargon:
APR (Annual Percentage Rate)
Definition: Represents the annual cost of borrowing. It includes not just the interest rate but also any fees and other costs associated with the loan. The APR gives borrowers a comprehensive view of the true cost of borrowing.
Compound Interest
Definition: Interest that's calculated not just on the principal loan amount, but also on any accumulated interest from previous periods. It can significantly increase the amount of money you owe over time if not addressed promptly.
Collateral
Definition: Assets that a borrower offers to a lender as security for a loan. If the borrower fails to repay the loan, the lender can seize the collateral to recover their losses. Common examples include real estate, vehicles, and equipment.
Principal
Definition: The initial amount of money borrowed or the amount still owed on a loan, excluding interest.
Fixed Interest Rate
Definition: An interest rate that remains constant over the life of the loan. It provides predictability in repayment amounts.
Variable Interest Rate
Definition: An interest rate that can fluctuate over time based on an underlying benchmark or index. It can lead to varying repayment amounts.
Amortisation
Definition: The process of paying off debt in regular instalments over time. An amortisation schedule details how much goes towards interest and how much is applied to the principal balance with each payment.
Default
Definition: Failure to meet the legal obligations (or conditions) of a loan, typically when a borrower fails to make the required payments.
Underwriting
Definition: The process lenders use to evaluate the risk of lending to a borrower. It determines the terms and conditions of a loan.
Origination Fee
Definition: A fee charged by lenders to cover the costs of processing a loan. It's usually a percentage of the loan amount.
Term
Definition: The length of time over which a loan will be repaid. It can range from short-term (a few months) to long-term (several years).
