Calculate your business loan repayment, total interest, and amortisation schedule, including an optional balloon payment.
Rates as of Q2 2025 (example)
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A business loan calculator estimates the monthly repayment, total interest, and full amortisation schedule for a business loan, with the option to include a "balloon payment" — a larger lump sum due at the end of the term, after smaller regular payments. This helps business owners understand the cash flow impact of financing options for equipment, expansion, working capital, or other business needs.
This calculator uses the standard amortising loan formula, adjusted for any balloon payment — the regular monthly payments are calculated to pay down the loan to the balloon amount by the end of the term (rather than to zero), with the balloon amount due as a final lump sum.
Formula: Monthly Payment = amount required so that, after Loan Term × 12 monthly payments at the given interest rate, the remaining balance equals the Balloon Payment (Loan Amount × Balloon % ÷ 100). Total Cost = Loan Amount + Total Interest (including interest accrued on the balance leading up to the balloon payment).
Example: A £75,000 business loan at a 9% interest rate (example rate — enter the actual rate from a quote) over 7 years, with no balloon payment, gives a monthly payment of roughly £1,206, with total interest of about £26,300 over the full term. Adding a balloon payment would lower the monthly amount but require a lump sum — for example, a 20% balloon (£15,000) would reduce the regular monthly payments, with that £15,000 (plus any interest associated with it) due as a final payment. (Note: all figures in this example are for illustration purposes only and do not represent a loan offer.)
UK business loans come in many forms — unsecured loans (often for smaller amounts, based on the business's and/or director's creditworthiness), secured loans (backed by business assets or property, which can offer lower rates but put those assets at risk), and government-backed schemes designed to support smaller businesses or start-ups with more accessible terms. Lenders may require a personal guarantee from company directors for smaller businesses, meaning the director becomes personally liable for the debt if the business can't repay — it's important to understand this risk before signing. A balloon (or "bullet") repayment structure can help cash flow in the early years of a loan by reducing regular payments, but it requires planning for the lump sum at the end — either through accumulated cash, refinancing, or selling the financed asset. When comparing business loan offers, look beyond the headline interest rate to arrangement fees, early repayment charges, and whether the rate is fixed or variable over the term.
A balloon payment (sometimes called a bullet repayment) is a large lump sum due at the end of a loan term, after a series of smaller regular payments. It reduces your regular monthly payments but requires you to have a plan — such as savings, refinancing, or selling an asset — to cover the lump sum when it falls due.
A personal guarantee is a commitment by a company director (or another individual) to personally repay a business loan if the business itself can't. This means the director's personal assets could be at risk, not just the business's, and is common for loans to smaller businesses or those with limited trading history.
No — the default is an example only. Business loan rates vary significantly based on the lender, loan amount, term, security offered, and the business's (and/or directors') creditworthiness and trading history. Use the actual rate from a lender's quote for an accurate estimate.
A secured business loan is backed by an asset (such as property, equipment, or other business assets), which the lender can claim if the loan isn't repaid — this can result in a lower interest rate but puts that asset at risk. An unsecured loan doesn't require specific collateral, but may have a higher rate and often requires a personal guarantee from directors.
From time to time, the UK government has supported lending schemes aimed at smaller businesses or start-ups (such as Start Up Loans or various recovery-focused schemes), often offering more accessible terms than purely commercial lending. Availability and terms of such schemes change over time — check current government business support resources for what's currently available.
A longer loan term generally reduces the monthly payment but increases the total interest paid over the life of the loan, because interest accrues for longer on the outstanding balance. A shorter term increases monthly payments but reduces total interest — try comparing different terms to see this trade-off for your loan amount.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute a loan offer or financial advice. The default interest rate is a sample value and does not reflect rates currently available from any specific lender. Business loan terms, fees, security requirements, and personal guarantee terms vary by lender and depend on the individual business's circumstances. Always obtain a personalised quote from a lender and consult a qualified financial adviser or accountant before taking out business finance.