This assumes a standard reducing-balance repayment loan (equal monthly payments, interest calculated on the remaining balance) — the most common structure for UK business loans. Merchant cash advances and invoice financing work differently and aren't modelled here.
This gives you the standard maths behind an amortising loan — real offers can differ based on how a specific lender structures repayments, whether interest is calculated daily or monthly, and any early repayment charges or fees not entered above. Always check the lender's own representative example and full terms before signing anything.
A business loan calculator only tells you something useful if it shows the real total cost of borrowing, not just a monthly figure that sounds manageable. This tool uses the same reducing-balance amortisation maths a lender actually applies — interest calculated on the remaining balance each month, not the original loan amount — to work out your monthly repayment, total interest paid over the term, and the full cost once any arrangement fee is included.
It's built for standard fixed-term business loans. Merchant cash advances and invoice financing are structured completely differently and aren't modelled by this calculation.
APR (Annual Percentage Rate) represents the yearly cost of borrowing including most fees, making it the fairest way to compare offers from different lenders. A lower headline interest rate can still work out more expensive once fees are added, which is why comparing APR rather than just the rate matters.
Many lenders allow this, but some charge an early repayment fee to cover the interest they'd otherwise have earned. This calculator assumes the full term is paid as scheduled — always check a specific lender's early repayment terms before assuming you can exit early without a cost.
Yes — the underlying maths is the same regardless of the loan type, as long as it's a standard fixed-rate, fixed-term repayment loan. Just enter the rate and term the lender has actually offered you.