Business Loan Repayment Calculator

Last updated: April 2026

Loan Details

Repayment type

Loan amount

Annual interest rate

Enter the annual interest rate quoted by your lender. Typical UK SME loan rates range from 6%-25% depending on credit profile and lender.

Loan term

Most SME loans are 1-5 years. Property-backed loans can be longer.

Years

Months

Include arrangement fee?

Many lenders charge an arrangement fee of 1%-3% of the loan amount. Including this gives you the true cost of borrowing.

Monthly repayment£1,566.82

Total repayable£56,405.46

Total interest£6,405.46

Total cost of borrowing£6,405.46

Effective APR4.27%

Cost Visualisation

Loan amount£50,000.00

Total interest£6,405.46

Rate Comparison

RateMonthlyTotal Interest

6% £1,521.10£4,759.49

8% current£1,566.82£6,405.46

10% £1,613.36£8,080.94

12% £1,660.72£9,785.76

15% £1,733.27£12,397.59

To service this loan your business needs monthly revenue of at least £4,700.46 assuming 33% of revenue is available for debt service.

About this calculator

The Business Loan Repayment Calculator estimates monthly payments, total interest, total repayable, and repayment schedule for UK business borrowing. It is useful for company directors, sole traders, finance teams, and advisers comparing commercial loans, asset finance, start-up loans, working capital loans, and refinance options. The goal is to understand both the monthly cash-flow pressure and the full cost of borrowing before accepting finance.

Business loan repayment method

For a standard amortising loan, the calculator uses the loan amount, interest rate, and term to calculate a fixed monthly repayment. Each payment covers interest on the outstanding balance and a capital repayment. Interest falls as the balance reduces. Interest-only and irregular facilities need separate modelling.

monthly rate = annual interest rate / 12
monthly payment = principal x monthly rate / (1 - (1 + monthly rate)^(-months))
total repayable = monthly payment x number of months
total interest = total repayable - principal - fees paid separately
ending balance = previous balance + interest - payment

How to use the business loan calculator

Enter the amount the business wants to borrow.
Enter the annual interest rate or APR-style rate if that is what the lender quotes.
Enter the repayment term in months or years.
Add arrangement fees or setup costs if the calculator supports them.
Review the monthly repayment and total repayable.
Check the repayment schedule to see how capital reduces over time.
Stress-test a shorter term, higher rate, or lower cash-flow month before committing.

Worked examples

Commercial loan repayment

Input: GBP 60,000 loan over 5 years at 10% annual interest

Calculation: The calculator amortises the loan across 60 monthly payments.

Result: The output shows monthly repayment, total interest, and the balance after each year.

Shorter term comparison

Input: GBP 40,000 over 3 years compared with 5 years

Calculation: A shorter term increases monthly repayments but reduces interest duration.

Result: The business can compare lower total interest with higher monthly pressure.

Fee-inclusive comparison

Input: GBP 100,000 loan with GBP 2,000 arrangement fee

Calculation: The fee is considered alongside repayment cost for a truer comparison.

Result: A lower rate loan with a high fee may not be cheaper than a higher rate loan with no fee.

Monthly payment vs total cost

Many businesses search for "business loan repayment calculator" or "commercial loan repayment calculator" because they need a monthly payment. Monthly affordability matters, but total cost matters too. Extending the term can reduce each monthly payment while increasing the total interest paid.

Loan inputs to compare

Input	Why it matters	Check before signing
Loan amount	Sets the starting debt	Borrow only what the use case needs
Rate or APR	Controls interest cost	Confirm whether fees are included
Term	Spreads repayment over time	Longer terms often cost more overall
Fees	Can change true cost	Check arrangement, broker, and early repayment fees
Security or guarantee	Changes risk, not just price	Understand director guarantee exposure

Cash-flow checks

Seasonal income: A fixed monthly repayment can be harder in quiet trading months. Compare the payment with low-season cash flow, not just average revenue.
Tax and supplier timing: VAT, PAYE, corporation tax, rent, payroll, and stock purchases can all compete with debt repayment timing.
Debt service coverage: Many lenders check whether cash flow comfortably covers debt payments. A DSCR-style check can help before applying.

Common business loan mistakes

Looking only at monthly payment and ignoring total interest.
Comparing loans with different terms as if they are equivalent.
Missing arrangement fees, broker fees, or early repayment costs.
Assuming interest-only finance behaves like an amortising loan.
Ignoring security, personal guarantees, covenants, and cash-flow seasonality.

Financial information disclaimer

This calculator is for general business finance planning only and is not financial advice. Business loan terms, fees, security, guarantees, eligibility, and repayment structures vary by lender. Check the loan agreement and consider qualified advice before borrowing.

It does not assess affordability or credit approval.
It assumes regular repayment timing unless stated otherwise.
It may not model revolving credit, overdrafts, or revenue-based finance.

Frequently asked questions

How do I calculate business loan repayments?

Use the loan amount, annual rate, and repayment term to calculate the amortised monthly payment, then multiply payments across the term to estimate total repayable.

Is APR the same as interest rate?

No. APR is intended to reflect a broader annualised cost of credit, including certain fees. The interest rate is only one part of the cost.

Does a longer term reduce cost?

A longer term usually reduces monthly payment but can increase total interest because the debt is outstanding for longer.

Can this calculate commercial loan repayments?

Yes for standard capital-and-interest repayment loans. Specialist commercial facilities may need separate modelling.

Should I include arrangement fees?

Yes. Fees can change the true cost and may make a lower-rate loan less attractive.

Related calculators

APR Calculator
Debt Service Coverage Ratio Calculator
Business Runway Calculator
Merchant Cash Advance Calculator

How are business loan repayments calculated?

Business loan repayments are typically calculated using standard amortisation. Each monthly payment covers the interest due on the outstanding balance plus a portion of the capital. Early payments are predominantly interest; later payments are predominantly capital. Interest-only loans work differently: you pay only the interest each month and repay the full capital at the end of the term.

What is a typical interest rate for a UK business loan?

Interest rates on UK SME loans typically range from 6% to 25% per year depending on the lender, loan size, trading history, and your business credit profile. High street banks tend to offer lower rates but are harder to qualify for. Alternative lenders are more accessible but charge higher rates. Always compare the APR rather than the headline rate, as arrangement fees can significantly increase the true cost.

What is an arrangement fee?

An arrangement fee is a one-off charge by the lender for setting up the loan. It is typically 1%-3% of the loan amount and is either paid upfront or added to the loan balance. Adding the fee to the loan means you pay interest on it for the full term, increasing the total cost. Always factor the arrangement fee into your cost comparison.

What is the difference between APR and interest rate?

The interest rate is the annual cost of the loan as a percentage of the outstanding balance. The APR, or Annual Percentage Rate, includes all mandatory costs including arrangement fees and is a better measure of the true cost of borrowing. When comparing loans from different lenders, always compare APRs rather than headline interest rates.

Can I repay a business loan early?

Most business loans allow early repayment, but many lenders charge an early repayment fee, typically 1-6 months of interest. Check your loan agreement before making overpayments. Our Early Repayment Cost Calculator can help you assess the cost of settling early.