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Business loan calculator

Estimate fixed-rate business loan repayments using an annual interest rate and a separate upfront arrangement fee.

Loan amount

Annual interest rate

Loan term

Upfront arrangement fee

Enter the annual interest rate, not APR. The rate is divided by 12 for monthly interest. The arrangement fee is a percentage of the loan, paid upfront and not added to the loan balance; it is included once in the total payable. Estimate only; actual terms depend on lender checks.

Estimated monthly repayment

£0

Total payable including fee£0
Total interest£0
Upfront arrangement fee£0
Loan term5 years

What your result means

Explore regular business-loan payments and the effect of a separate arrangement fee. The calculation does not assess business performance, security or the ability to meet repayments.

Compare scenarios by changing one input at a time. The glossary explains the technical words used on this page.

Estimated monthly repayment: The capital-and-interest repayment on the loan, using the annual interest rate divided by 12.
Total payable including fee: All monthly repayments plus the separate upfront arrangement fee. It includes the original loan.
Total interest: All monthly repayments less the original loan. It excludes the arrangement fee.
Arrangement fee: Loan amount multiplied by the fee percentage. This fee is paid upfront, is not financed and is not charged interest.
Loan term: The selected number of years over which payments are calculated.

Enter the annual interest rate, not APR. This tool calculates interest using the annual rate divided by 12 and adds the entered arrangement fee as a separate upfront cost. It does not calculate an APR or assess whether the business can afford the loan.

Methodology: how the calculation works

The model uses amortisation with a nominal annual interest rate: the entered rate is divided by 12 to calculate monthly interest. A separate arrangement fee is paid upfront and is not financed.

Read the loan amount and multiply the selected years by 12 to obtain the number of monthly payments.
Divide the annual interest rate by 100 and 12 to obtain the monthly rate. This is a nominal-rate calculation, not an APR conversion.
Calculate equal month-end capital-and-interest repayments. At 0%, divide the original loan by the number of months.
Calculate total interest from all unrounded monthly payments less the original loan. Multiply the loan by the arrangement-fee percentage and add this upfront fee to total repayable.

See the calculation formula

M = P × r ÷ (1 − (1 + r)⁻ⁿ)

M is the monthly payment, P is the loan, r is the annual percentage divided by 100 and then 12, and n is the number of monthly payments. The raised −n means take the reciprocal of (1 + r) multiplied by itself n times. At 0%, M = P ÷ n. The rate input is a nominal annual interest rate, not APR. Separately, upfront fee = original loan × fee percentage ÷ 100; total repayable = M × n + upfront fee.

The assumptions behind your estimate

The entered rate stays unchanged for the full term, not just an initial deal period. The pre-filled rate is an illustration, not a live offer.
Payments occur at the end of each month. Daily interest, irregular dates, missed payments and changes of rate are not modelled.
Money is displayed to the nearest pound. Totals use unrounded calculations, so multiplying the displayed payment by the number of months can differ from the displayed total.
The full loan is advanced at the start and repayments begin one month later. The arrangement fee is paid separately upfront, not deducted from the loan or added to the financed balance.
The fee percentage applies to the original loan. Only that entered fee is included; no interest is charged on it.
No changes of payment amount, payment holidays or early settlement are modelled. An available term in the tool is not proof that a provider offers it.

Two simple worked examples

Both illustrations borrow £50,000 for five years at an illustrative 11.9% annual interest rate. Compare no arrangement fee with a separate 2% upfront fee. The interest rate shown is not an APR.

Worked example

No arrangement fee

£50,000 borrowed · 11.9% annual interest rate · 5 years · 0% upfront fee

£1,110

illustrative monthly repayment

Total payable including fee: £66,582
Total interest: £16,582
Upfront arrangement fee: £0

Worked example

A 2% arrangement fee

£50,000 borrowed · 11.9% annual interest rate · 5 years · 2% upfront fee

£1,110

illustrative monthly repayment

Total payable including fee: £67,582
Total interest: £16,582
Upfront arrangement fee: £1,000

A closer look: term, rate and an upfront fee

Keep borrowing at £50,000 and compare the payment schedule with the separate initial fee. A low monthly figure does not include the upfront cash commitment.

On a small screen, swipe the table sideways to see every figure.

Business loan: illustrative scenarios
Scenario	Inputs and assumptions	Estimated monthly repayment	Total payable including fee	Total interest	Upfront arrangement fee
A · Five years, 2% fee	£50,000 borrowed · 11.9% annual interest rate · 5 years · 2% upfront fee	£1,110	£67,582	£16,582	£1,000
B · Three years, 2% fee	£50,000 borrowed · 11.9% annual interest rate · 3 years · 2% upfront fee	£1,658	£60,700	£9,700	£1,000
C · Five years, 0% fee	£50,000 borrowed · 11.9% annual interest rate · 5 years · 0% upfront fee	£1,110	£66,582	£16,582	£0
D · Five years, higher rate	£50,000 borrowed · 14.9% annual interest rate · 5 years · 2% upfront fee	£1,187	£72,212	£21,212	£1,000

A and C have identical monthly repayments because the fee is separate. B pays capital back sooner but needs more monthly cash. Compare borrowing cost with what the business can reliably pay, rather than treating the largest available term as a product recommendation.

Examples use the stated assumptions and the calculator’s rounding. They are illustrations, not product offers, personalised recommendations or guarantees.

What the estimate does not include

An APR calculation, daily-interest schedules, irregular payment dates and changes of rate.
Fees other than the entered upfront arrangement fee, early settlement and missed payments.
Assessment of trading accounts, cash flow, rental income, personal guarantees, security and the ability to repay.

Business loan glossary: the words explained

Plain-English definitions of the finance, calculation and technical terms used on this page. Dotted links take you directly to the relevant definition.

Affordability / affordability check: An assessment of whether payments fit income, spending and other financial commitments. This tool does not perform that assessment.
Amortisation: Paying off borrowing gradually through regular payments covering interest and some capital. With a constant rate and payment, the interest share reduces as the balance falls.
Annual / monthly rate: Annual means per year; monthly means per month. A monthly rate is not interchangeable with an annual rate. The methodology explains this tool’s conversion.
APR (annual percentage rate): A measure of the annual cost of credit including interest and applicable compulsory charges, calculated using specified assumptions. It is not simply a nominal annual rate divided by 12.
Arrangement fee / product fee / lender fee: A charge for setting up or providing a financial product, separate from interest. A percentage fee needs a stated base amount.
Balance / outstanding balance: The money held in an account, or the amount still owed on a loan, at a given time.
Broker / credit broker / broker fee: A business that introduces customers to finance providers or helps arrange finance, rather than lending the money itself. A broker fee is a charge for that service.
Capital / principal / amount borrowed: The original money borrowed, separate from interest. Paying back capital reduces the outstanding loan.
Cash flow: Money coming into and going out of a business or household over time. A low payment does not by itself show that borrowing is affordable.
Compounding / compound interest: Adding interest or investment growth to a balance so that it can itself earn interest or growth in later periods.
Credit / finance / borrowing: Money made available to borrow and repay later, usually with interest or charges.
Credit check / credit status / credit history: A check of information about past borrowing and repayments, and the financial record it describes. Providers may use it when assessing an application.
Early repayment charge / early settlement charge: A charge that may apply when some or all of borrowing is repaid ahead of schedule. The agreement sets out any conditions and limits.
Eligibility / lender criteria: The requirements a provider sets for an application. A calculated repayment does not show that an applicant qualifies.
Estimate / illustration / projection: A result based on stated inputs and assumptions, not a promise of what will happen or a provider’s offer.
Financial Conduct Authority (FCA) / authorised and regulated: The UK financial-services regulator named in the site footer. Authorisation gives a firm permission for specified activities; regulation means it must follow the applicable rules.
Fixed rate / deal period: A fixed rate stays unchanged for an agreed period. That period may be shorter than the whole loan term.
Interest / interest rate: Interest is a charge for borrowing or a return paid on savings. The rate expresses it as a percentage over a stated period.
Lender / provider: The organisation supplying a loan or financial product and setting its terms.
Methodology: The calculation method, steps and assumptions behind an estimate.
Mortgage / secured borrowing / security: A loan backed by an asset such as property. Security is the asset a lender may use to recover unpaid borrowing through the applicable legal process.
Nominal annual rate: An annual rate before allowing for compounding within the year. Dividing it by 12 gives the monthly rate used in these repayment calculations.
Payment holiday: An agreed temporary pause or reduction in payments. It can affect the balance and cost and is not included here.
Personal guarantee: A promise by an individual to repay business borrowing if the business does not. The agreement determines their obligations.
Quote / finance offer: Proposed prices and conditions from a provider. It is different from an illustration and may still depend on checks or conditions.
Rental income: Money received for allowing someone to use a property. This calculator does not check whether it covers the borrowing costs.
Repayment / monthly payment: Money paid back to a lender. A capital-and-interest payment covers interest and reduces the amount borrowed. An interest-only payment does not reduce it.
Rounding / unrounded: Shortening a number for display. An unrounded calculation keeps the more precise value when working out totals.
Term / repayment period: The length of time over which the calculation runs. For borrowing, it is the planned repayment period, not necessarily the length of an introductory rate deal.
Total interest: All the interest in the calculation, excluding the original loan and any separately stated fees.
Total repayable / total payable: The combined amounts counted by this tool. Read the results explanation to see whether fees, deposits or a final capital payment are included.
Trading history / trading accounts / business performance: Information about a business’s past activity and financial results, including income, costs and profit or loss.
Upfront fee / upfront payment: Money paid at the start instead of added to the loan or paid at the end.

Frequently asked questions

Is the arrangement fee included in monthly repayments?

No. It is calculated from the original loan and added separately to total repayable. It is an upfront cash cost and does not attract interest in this model.

Should I enter APR or the annual interest rate?

Enter the annual interest rate specified for the loan, not APR. APR is an annual cost measure that can include compulsory charges. This model uses a nominal annual interest rate divided by 12 and adds its entered fee separately; it does not calculate APR.

Does the calculator assess business affordability?

No. It does not use business cash flow, accounts or existing commitments to test repayment capacity.

Does it cover every business-finance product?

No. It models regular capital-and-interest payments, not finance with different structures or payment schedules.

Does an estimate mean no personal guarantee is needed?

No. Security and guarantee requirements depend on the actual provider and agreement; the tool does not determine them.

Explore your next step

Prepare a business cash-flow view and request a full schedule of payments, fees and security requirements before deciding on borrowing.

About this explanation. The methodology describes this calculator. Worked examples were checked against its calculation and an independent calculation. This is general information, not a professional recommendation or formal compliance approval.

Further reading from MoneyHelper and government sources: