Business loan calculator

How to use the business loan calculator

Enter the amount you want to borrow, the annual interest rate, the term in months and any arrangement fee. The calculator assumes equal monthly repayments of capital and interest and shows the monthly payment, the total interest and the total cost including the fee.

The figures are illustrations, not a quote. Business lenders price each application individually, and the rate you are offered depends on your trading history, accounts, credit profile, the security available and the purpose of the loan.

Secured or unsecured business loans

A secured business loan is backed by an asset, such as property or equipment, which the lender can rely on if the loan is not repaid. An unsecured business loan does not take a specific asset as security, but lenders often ask directors for a personal guarantee, which makes them personally responsible if the business cannot pay. Unsecured borrowing usually costs more and runs for a shorter term. Always take legal advice before signing a personal guarantee.

What lenders want to see

• A clear purpose. What the money is for and how it helps the business, not just the amount. Our business loan application checklist explains how to set it out.
• Affordability. Recent accounts, management figures and business bank statements that show the repayments can be met.
• The people. Directors’ experience and credit history, especially for younger companies.
• Existing borrowing. Other loans, overdrafts, asset finance and tax arrangements.

Alternatives to a term loan

A term loan is not always the best fit. If the money is tied up in unpaid invoices, invoice finance may release it as you trade. If you are buying vehicles, plant or machinery, asset finance through hire purchase or leasing spreads the cost against the equipment itself. If you are buying or refinancing premises, a commercial mortgage is usually the longer-term option.

Business finance for Hampshire firms

We work with trades, manufacturers, marine and defence suppliers, retailers, professional firms and family businesses across Fareham, Portsmouth, Southampton and the rest of Hampshire, as well as clients across the UK by phone and video. You deal with Charles or Melanie directly from the first call to the funds landing.