Wondering how much a business loan is going to cost you?
Then use our calculator below to get an idea on monthly costs and how much you could borrow in 2019.
Business Loan Calculator Explained
Below we explain in a bit more detail what each of the fields means and what typical values look like.
Loan Amount: This is quite simply how much you want to borrow. Typically you won’t be able to borrow less than £1,000. In terms of the maximum amount you can borrow, this will most likely be constrained by your business’ financial health, lender type and the purpose of your loan.
For example, high-street banks usually cap start-up and new business loans at around £50,000, whereas speciality lender may be able offer up to £200k, but at much higher interest rates.
If you want to get a better idea how much you can borrow, click here to compare loans on Funding Options.
Annual Interest Rate: The interest rate on your loan can vary widely across lenders. For example, many high-street banks offer unsecured business loans as low as 4.9%, with typical rates being closer to 10%.
However, the loan amounts can often be quite low. Alternative lenders are often willing to offer larger loans, but at much higher interest rates, sometimes running to as high as 60% per year, for businesses with very poor credit.
Loan Term: This is how long you want to borrow the money for. The vast majority of non-mortgage business loans are from 6 month to 60 months (5 years). You can sometimes get loans for longer, but fewer companies offer them, which means they may be more expensive.
Approximate Monthly Loan Payment: This is roughly how much your loan will cost you per month and includes both interest and principal payments.
Total Repayment Amount: This is the total cost of your loan and includes the initial loan amount plus all interest paid during the term of your loan.
Total Amount of Interest: This is the total amount of interest you’ll pay during the term of your loan.
Other Fees To Consider
Arrangement Fee: One common fee that we haven’t included in our calculator are arrangement fees. This an amount added on to your loan for the privilege of borrowing and can be anywhere from 1-10% of the loan value.
Repayment Holiday: Some lenders will give you some time before you have to start repaying your loan. However beware that interest normally compounds during this period, which will mean larger payments after the repayment holiday period is over.
Early Repayment Fee: If you get a fixed rate business loan, you may have to pay an early repayment fee if you decide to pay off the loan before the end of the term.
How Much Can I Borrow?
This is a very difficult question to answer as there are many variables. Generally speaking the better your credit history and the longer you’ve been in business the more you’ll be able to borrow.
Things banks and lenders will look at include: cash flow, turnover, net profit, ability to manage monthly payments, credit history, and bank account statements.
You can see what some of the UK’s top lenders offer in our guide to the Top 28 Business Loans.
However, your best bet to find out exactly how much you can borrow is to use a service like Funding Options, which allows you to compare options and even apply online.
How Can I Apply For a Business Loan?
You basically have two choices when it comes to applying for a loan. Either you go direct to the bank or lender or you use a broker or comparison service.
If you click the button below, you can get a free no obligation quote from Funding Options, who compare up to 50 providers:
Disclaimer: We are a Funding Options affiliate, which means we are paid a commission of you use them to apply for a loan. However, you are under no obligation to use them to take out a loan and they are 100% free to use.