Work out what a business loan will really cost
A loan quote tends to arrive as a rate and a monthly payment. Neither tells you what you’ll have paid by the end, and that’s the number worth knowing. This business and commercial loan calculator takes the amount, the term, the rate and the fees and shows the monthly repayment, the total interest, and the full cost of borrowing once fees are in.
It suits most term loans, secured or unsecured. If you’re borrowing to buy or refinance commercial property, our commercial property mortgage calculator is the better tool, and for equipment or vehicles try the asset finance calculator.
Every figure is an estimate. The rate and fees are the ones you enter, so use the figures from a quote if you have one.
Business Loan Calculator UK
Estimate repayments, total cost and whether your cash flow can carry the loan.
Get a formal quote
Happy with the figures? Open the form below and your results are added to the message box for you. Add your details and anything else we should know, send it, and a specialist will come back with lender options and a formal quote.
How the business loan calculator works
Start with how much you want to borrow and for how long, in years or months. Then the rate. How it’s quoted matters more than it looks. Most business loans charge interest on what you still owe, which is a reducing balance. A flat rate charges it on the full amount for the whole term, and the same number costs a lot more that way.
The calculator assumes capital and interest, so every payment pays off some interest and some of the loan, and the balance reaches zero on the last day. Switch to interest only and you’ll pay just the interest each month, with the whole loan due at the end. A balloon, entered as a percentage of the loan, shrinks the monthly payment and leaves a lump sum waiting for you. A capital repayment holiday means interest only for the first few months.
Two boxes take fees: the arrangement fee, which lenders usually set as a slice of the loan, and a second for any fixed charges in pounds. The last box is the cash your business can comfortably find each month. Put in an honest figure, because the cover result depends on it.
Reading the results
The monthly payment is the number that leaves your bank account, so test it against your cash flow first. Total interest is what the lender earns over the term, and adding the loan itself gives the total repayable.
Fees change the picture. The calculator adds them to give you the full price of the loan in pounds, and that’s the figure to line up when two lenders quote different rates and different fees. The effective rate does the same job as a yearly percentage, which stops a low rate with heavy fees looking better than it is. Below that sits a month-by-month schedule showing how much of each payment is interest and how much is capital.
Then there’s cover. It takes the cash you entered and divides it by the payment. A result of 1.25 or more turns green, between 1 and 1.25 amber, and under 1 red. Beside it you’ll see the biggest loan your cash flow would carry at 1.25.
How term changes the cost
Take £100,000 at 9% a year with a 2% arrangement fee. Over five years it costs about £2,076 a month. You repay about £124,550, of which £24,550 is interest, and the £2,000 fee takes the full cost to about £26,550.
Cut the term to three years and the payment jumps to about £3,180, though interest falls to about £14,479. Go the other way, to seven years, and you pay about £1,609 a month but about £35,148 in interest. Longer is easier on the month and dearer overall. What matters is how much the business can spare each month without strain, so decide that before you choose the term.
Flat rate or reducing balance
Flat rates look cheap, and that’s the point of them. Say you borrow £50,000 over three years at 6% flat. The interest is £9,000, and the payment is £1,639 a month. It feels like 6%.
It isn’t. Every month you owe less, but the interest was worked out on the full £50,000 from day one. Put those same payments on a reducing balance and they’re equal to about 11.1% a year. So a flat 6% can cost nearly twice what it sounds like. If a quote doesn’t say how the rate is charged, ask before you compare it with anything else.
Interest only, balloons and repayment holidays
Interest only is the gentlest option on the monthly figure. On £100,000 at 9% you’d pay £750 a month. Five years later you’ve paid £45,000 in interest and the whole £100,000 is still owing, and lenders will want to hear exactly how you plan to clear it. A hope that trading will be good isn’t an answer.
A balloon sits between the two. Leave 20% of that loan, £20,000, until the end and the five-year payment falls from about £2,076 to about £1,811. That’s £265 a month back in your pocket. Interest rises to about £28,640 and the £20,000 still has to be found. A repayment holiday does something similar at the start of the loan, which can help a business waiting on a big contract or heading into its busy season. All three work by pushing cost into the future. It doesn’t go away, and it will be waiting when you get there.
What affects the cost of a business loan
Everyone looks at the rate first, and it’s driven by how the lender sees you: how long you’ve traded, how healthy the accounts look, what you already owe. Security moves the price too. Lending against property or other assets is usually cheaper than unsecured, although the lender can take the asset if you default. Smaller companies are often asked for a director’s personal guarantee as well, which puts your own assets in reach if the business can’t pay.
Then there are the charges. Arrangement, valuation and legal costs all go on the bill, and a few lenders add an early repayment fee if you clear the loan sooner than planned. Whenever you compare offers, ask each lender to state the full cost in pounds with every fee included. It’s the only way two quotes end up on the same footing.
Typical business loan rates, as at October 2026
The Bank of England held Bank Rate at 3.75% on 17 September. Six members voted to hold and three wanted a rise, so don’t expect borrowing to get cheaper soon.
Business loan pricing sits well above Bank Rate, and it swings much more than mortgage pricing does. Published market indices put loans secured on property at roughly 3% to 15% a year, with the keenest rates going to lower loan-to-value deals and strong businesses. Unsecured lending starts near 10% for an established, well-run company and climbs past 30% for a young firm or a weaker credit record. Treat all of that as a ballpark. What you’re offered depends on your business, the security you can give and the lender in front of you.
How much can my business borrow?
The calculator tells you what a loan costs. What a lender will actually offer is a separate question, and it comes down to your business: turnover, profit, how long you’ve been going, what you already owe, and whether cash flow comfortably covers the repayment. For that last one many lenders run a debt service coverage test, which our explanation of the debt service coverage ratio walks through.
You can do a quick version yourself. Work out what’s left in the business each month after costs and set the calculator’s payment against it. If there’s little headroom, borrow less or stretch the term. A broker can then tell you which lenders are likely to offer the amount you need and what they’ll want in return.
Business loan, commercial mortgage or asset finance
A business loan covers day-to-day spending such as stock, a refit, expansion or working capital, and it can be unsecured or secured on business assets. A commercial mortgage is a long-term loan to buy or refinance commercial property, and the property is the security. Asset finance pays for one vehicle or machine, with that item as the security. The repayment sums look alike across these products. The terms, rates and lender criteria don’t, so pick the calculator that matches what you’re borrowing for.
Assumptions behind the calculator
The calculator charges interest monthly on the outstanding balance at a fixed rate and assumes equal payments across the term. Figures are rounded to the nearest pound. Fees are included only when you enter them. Variable rates, lender-specific charges and differing payment dates can all shift the real numbers. Treat the results as estimates for planning. They aren’t an offer of finance.
Where the calculator stops and a broker starts
A calculator prices one loan. It can’t say which lenders will back your business, what they’ll ask to see, or how to present the application so it doesn’t fall over on a technicality. That’s our side of it.
We search the market for lenders that fit your business, explain what each option really costs and handle the application from start to finish. Our business loans page covers lending from £20,000 and up. If the money is for property, have a look at commercial mortgages, and if cash is tied up in unpaid invoices, invoice finance may suit you better.
Frequently asked questions
How do I calculate monthly business loan repayments?
Enter the loan amount, the term and the interest rate. The calculator works out the fixed monthly payment that pays off the balance by the end of the term, covering interest and capital together.
How much interest will I pay?
That depends on the amount, rate and term. Total interest is the total repayable minus the amount you borrowed, and it rises with a longer term or a higher rate. The calculator shows it as its own figure.
Does the calculator include fees?
Yes, if you enter them. Arrangement fees and other fixed fees are added to give the total cost of borrowing, which is the full price of the loan, not just the interest.
What's the difference between a flat rate and a reducing balance rate?
A flat rate charges interest on the original amount for the whole term. A reducing balance rate charges it on what you still owe. The same quoted number costs far more as a flat rate, so check how a quote is calculated.
What's a balloon payment?
A lump sum you agree to pay at the end, which lowers the monthly payments during the term. You’ll need to pay it or refinance it when the term ends, so it suits a business with a clear plan for that moment.
Is a business loan the same as a commercial loan?
For most purposes, yes. Both describe borrowing for business use, and the calculator works for either. Borrowing to buy commercial property is usually a commercial mortgage, which has its own calculator.
How much can my business borrow?
It depends on your turnover, profit, trading history and existing debt, and on the lender. A broker can tell you what’s realistic for your accounts.
Final thoughts
A calculator shows what a loan costs. Whether a lender will provide it, and on what terms, depends on the business behind the numbers. Use the calculator to test the cost and the cash flow, and to compare quotes on the total cost of borrowing rather than the rate alone.
Commercial Finance Network is a whole-of-market commercial finance broker working with businesses and property investors across the UK and internationally. We are directly authorised and regulated by the Financial Conduct Authority. Business loans and other business finance are not regulated by the Financial Conduct Authority. Where a loan is secured against property, your property may be repossessed if you do not keep up repayments. Where a personal guarantee is given, personal assets may be at risk.
Call us on +44 1494 622 111 or email info@cfnuk.com to discuss a business loan for your company.
Related pages
- Commercial Finance – Whole-of-market access to the full range of commercial lending products.
- Asset Finance – Hire purchase, finance lease and refinance for vehicles, plant and equipment.
- Working Capital Finance – Short-term funding to smooth cash flow and cover day-to-day costs.
- Bridging Loan Calculator – Estimate monthly costs and fees on short-term finance.
