Business Loan Calculator UK
Estimate the monthly repayments, total cost and total interest on a UK business term loan in seconds. Enter the loan amount, annual interest rate and term to model different scenarios. For illustration only — actual terms depend on the lender and your circumstances. Ready to borrow? See our business loans service.
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How business loan repayments are calculated
A standard business term loan is amortising — you repay it in equal monthly instalments that cover both interest and capital over the term. The monthly payment is worked out with this formula:
M = P × r × (1 + r)^n
÷ ((1 + r)^n − 1)
P = loan amount
r = monthly interest rate (annual rate ÷ 12)
n = number of monthly payments (term in months)Although every instalment is the same size, the split changes over time: early payments are mostly interest, and as the balance falls more of each payment goes towards the capital. That is why repaying early, or choosing a shorter term, saves a disproportionate amount of interest.
Worked example: £100,000 over 5 years
Suppose you borrow £100,000 at 7% per year over 60 months:
Loan amount (P) £100,000
Annual rate 7% → monthly r = 0.5833%
Term (n) 60 months
Monthly payment ≈ £1,980.12
Total repayment ≈ £118,807
Total interest ≈ £18,807Stretch the same loan to 84 months and the monthly payment drops to roughly £1,509 — easier on cash flow, but the total interest rises to about £26,800. The calculator above lets you weigh that trade-off for your own figures.
Types of business finance
A term loan is not always the best fit. The main options are:
- Term loan — a lump sum repaid over a fixed period; best for one-off investments and expansion.
- Overdraft / revolving credit facility — flexible short-term borrowing for cash-flow gaps; you pay interest only on what you use.
- Asset finance — spreads the cost of equipment, machinery or vehicles, with the asset itself acting as security.
- Invoice finance — releases cash tied up in unpaid invoices, improving working capital.
- Commercial mortgage — long-term finance to buy business premises.
Secured vs unsecured business loans
A secured loan is backed by an asset such as property, equipment or invoices. Because the lender's risk is lower, secured loans typically offer lower rates, larger amounts and longer terms — but the asset can be repossessed if you default. An unsecured loan needs no collateral and is quicker to arrange, but rates are higher, amounts smaller, and lenders usually ask company directors for a personal guarantee.
How much can your business borrow?
Unsecured facilities commonly range from £1,000 to around £500,000, often capped at roughly one to three months of turnover. Secured and asset-backed lending can go considerably higher. Lenders assess trading history, turnover and profitability, your business and personal credit profile, affordability (can the repayments be met from cash flow?), and any security or guarantees on offer. Newer businesses and startups can also use the government-backed Start Up Loan scheme (£500–£25,000).
Watch the total cost, not just the monthly payment
The rate you enter here is treated as a simple annual rate applied monthly — ideal for comparing scenarios. A lender's representative APR also folds in arrangement fees and compounding, so the headline cost of a specific offer can differ. Before signing, always compare the APR, any fees, early-repayment charges and the total amount repayable across competing quotes.
Get a real quote
This calculator gives a sensible estimate; a formal quote depends on the lender and your circumstances. As a finance broker we compare options across a panel of lenders to find terms that suit your business. Read about our business loans service or request a no-obligation quote.
Frequently Asked Questions
How is a business loan repayment calculated? ▼
Most business term loans use the standard amortising formula: M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments. Each payment is the same, but early payments are mostly interest and later payments are mostly capital. This calculator uses that formula to estimate your monthly payment, total repayment and total interest.
What are the monthly repayments on a £100,000 business loan? ▼
It depends on the rate and term. As a guide, a £100,000 loan at 7% over 5 years (60 months) works out at roughly £1,980 per month, repaying about £118,800 in total (around £18,800 of interest). Spread the same loan over 7 years and the monthly payment falls but the total interest rises. Enter your own figures above to see an exact estimate.
How much can my business borrow? ▼
Unsecured business loans in the UK typically range from £1,000 to around £500,000, often capped at roughly one to three months of turnover. Secured and asset-backed lending can go much higher. Lenders look at trading history, turnover, profitability, credit profile, affordability and any security or personal guarantees offered. As a broker we match your profile to lenders most likely to approve.
What is the difference between a secured and unsecured business loan? ▼
A secured loan is backed by an asset (property, equipment or invoices), which usually means lower rates, larger amounts and longer terms — but the asset is at risk if you default. An unsecured loan needs no collateral and is faster to arrange, but rates are higher, amounts smaller and a personal guarantee from a director is often required.
What interest rates do UK business loans charge? ▼
Rates vary widely by lender, loan type and risk. At the time of writing, established businesses with strong finances might see rates from around 6–8% per year, while newer businesses or unsecured facilities can be 10–20% or more. Asset finance and invoice finance are priced differently. The rate in this calculator is one you enter yourself, so you can model best- and worst-case scenarios.
Is the rate in this calculator an APR? ▼
The calculator treats the rate you enter as a simple annual rate applied monthly, which is fine for estimating repayments. A lender's representative APR also includes certain fees and the effect of compounding, so the true cost of a specific offer may differ. Always compare the APR and total cost of any formal quote before signing.
Can a startup get a business loan? ▼
Yes. Newer businesses and startups can access the government-backed Start Up Loan scheme (a personal loan of £500–£25,000 for business use), as well as some lenders who accept limited trading history. Expect higher rates and a likely personal guarantee. A solid business plan and cash-flow forecast significantly improve approval chances.
What types of business finance are there besides a term loan? ▼
Beyond a standard term loan you might use a business overdraft or revolving credit facility for short-term cash flow, asset finance to spread the cost of equipment or vehicles, invoice finance to release cash tied up in unpaid invoices, or a commercial mortgage to buy premises. The right option depends on what the money is for and how quickly you can repay it.
Does using this calculator affect my credit score? ▼
No. This calculator runs entirely in your browser, performs no credit check and stores nothing. It is for illustration only. Submitting a formal loan application with a lender may involve a credit search, but estimating repayments here does not.
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