Business loan calculator

How the monthly repayment is worked out

The calculator treats an unsecured business loan the way lenders actually run it: as a reducing-balance, amortising loan. It takes the amount you want to borrow, applies the annual rate you enter, and spreads the debt into equal monthly instalments across the term using a standard annuity formula. Every payment is the same size, but its makeup changes over time. Early on, most of the payment is interest charged on the outstanding balance; as the balance falls, less of each payment is interest and more of it clears capital. That is why the balance-paydown chart curves gently at first and steepens toward the end. The three figures it returns are the monthly repayment (what leaves your account each month), the total interest (the whole cost of the borrowing across the term), and the total repayable (capital plus interest). Change any one input and all three move: a higher rate lifts the monthly payment and the total interest; a longer term lowers the monthly payment but raises the total interest, because you owe the money for longer. The figure here is indicative and for planning; the lender sets the actual rate once they have assessed your business.

APR, flat rate and total interest: why the percentages differ

You will see interest quoted in more than one way, and they are not contradictory, they just measure different things. The APR (12% in the default example) is charged each year on the balance you still owe. Because you pay the loan down every month, the balance keeps falling, so the actual pounds of interest come to less than 12% of the original amount. The total interest (about £9,786 on a £50,000 loan over three years) is every pound of interest added across the whole term. As a share of what you borrowed, that is the total interest percentage, roughly 19.6%, which is naturally larger than the APR because it spans three years, not one. Spread evenly across the term, it works out to a flat-rate equivalent of about 6.5% a year, and this is the number to treat with care: some lenders and brokers quote a flat rate precisely because it looks far lower than the APR, even though the loan costs exactly the same money. The rule is simple. Compare loans on APR, or on the total interest in pounds, and never weigh a flat rate against an APR as if they were the same thing. This calculator shows all of them so you can see how they line up.

Term, rate and total cost: the trade-off to get right

The main structural lever on an unsecured loan is the term, and it is a genuine trade-off rather than a free choice. Stretching a loan from three years to five will noticeably cut the monthly payment, which protects cash flow, but you pay interest for two extra years, so the total repayable climbs. Shortening the term does the opposite: a heavier monthly commitment, but meaningfully less interest overall. There is no universally right answer; it depends on whether your priority is protecting monthly cash flow or minimising the lifetime cost. A second lever is how the rate is quoted. Most unsecured business loans are priced as a fixed annual rate with a fixed monthly payment, so your budgeting is predictable from day one. Watch for two things that the headline rate can hide: an arrangement or facility fee (often 1% to 5%, sometimes added to the loan), and whether early settlement is allowed cleanly or carries an interest penalty. A loan that looks cheap on rate can cost more once fees and inflexible early-repayment terms are counted. Model both a shorter and a longer term above, then weigh the monthly figure against the total repayable before you commit.

What actually drives your rate

An unsecured loan has no property or asset as security, so the lender is pricing your business, not a piece of collateral. That makes the covenant, your trading strength, the single biggest driver of the rate. The main levers are:

Trading history and turnover. Established, profitable companies with two or more years of filed accounts and steady revenue attract the keenest pricing. Younger businesses, or those with thin or lumpy income, price higher or are steered toward alternative products.

Affordability. Lenders test whether existing cash flow comfortably covers the new repayment on top of current commitments. Strong, consistent bank turnover matters as much as the profit line.

Personal guarantee. Most unsecured business loans require a director's personal guarantee. Offering one can unlock a sharper rate or a larger facility, because it gives the lender recourse; declining one narrows the market and lifts the price.

Credit profile and sector. Both the company's and the directors' credit records feed in, as does the sector's risk reputation. Clean records and a mainstream sector price best.

Because there is no asset backstop, unsecured pricing sits higher than secured lending, broadly 8% to 25%+ a year. The table below gives indicative ranges by borrower profile; they are illustrative only, and the offer you receive is the lender's alone.

How much you can borrow, and what lenders look for

Unsecured business loans in the UK typically run from around £10,000 up to £500,000, occasionally more for strong trading companies, over terms of one to six years. A common rule of thumb is that lenders will consider lending up to roughly one to three months of turnover, though affordability and profitability, not a formula, decide the final number. Because we place these deals rather than lend ourselves, we match your case to lenders whose appetite fits your ticket size, sector and trading profile, rather than firing one application at a single desk and hoping. To move quickly, have ready your most recent filed accounts, the last three to six months of business bank statements, details of any existing borrowing, and the directors' details for the guarantee and credit check. Lenders are assessing two things: whether the business can comfortably service the repayment, and whether the directors are a sound risk given there is no security. A clear, honest picture on both moves a case forward fastest. Any figure discussed before a formal offer is indicative; the amount, rate and term are the lender's decision and depend on your business.

How we help you get a sharper rate

A handful of things genuinely move the price on an unsecured loan, and our job as your broker is to line them up in your favour before a single lender sees the case.

We take it to the right lender first. The unsecured market is crowded and uneven; high-street banks, challenger banks, fintech lenders and specialist funders each have a different appetite by sector, turnover band and loan size, and the same business can be a decline at one desk and a keen yes at another. Applying one by one is slow and leaves credit footprints that can dent your score. We hold that criteria detail across our panel, so we focus your case on the lenders most likely to price it well and package it to be assessed properly the first time.

We structure the deal to price well. We will position your accounts and bank turnover the way an underwriter reads them, frame the affordability case, and advise on where a director's guarantee or a slightly shorter term unlocks a better rate. Small structuring choices often move the price more than shopping around does.

We tell you straight what is realistic. We cannot promise a rate or an approval, because those sit with the lender, but we can give you an honest read on where your deal is likely to land and save you the hours a scattergun search would cost. It costs nothing to start and there is no obligation. Send us your numbers and we will come back with indicative terms from lenders whose criteria fit.