Business Loan Calculator for UK Businesses

Last reviewed: 17 May 2026

Calculate UK business loan repayments at Bank of England-aware rates. Monthly payment, total interest, and full amortisation schedule in sterling.

Monthly business loan payment uses the standard amortisation formula: P × [r(1+r)^n] / [(1+r)^n − 1], where P is principal, r is the monthly rate (APR ÷ 12 ÷ 100), and n is total months. A $50,000 loan at 8% APR over 60 months has a $1,013.82 monthly payment.

A UK business loan calculator uses the standard amortisation formula to compute monthly repayments and total interest cost. The Bank of England base rate drives variable SME lending, with high-street banks pricing unsecured loans at base + 3-8%. The British Business Bank publishes monthly UK SME finance benchmarks.

UK business borrowing in 2026 looks very different from the pre-2022 era. With BoE base materially higher than the 0.1% of 2021, the all-in cost on an unsecured SME term loan typically sits at 9-13%, and even Recovery Loan Scheme / Growth Guarantee Scheme borrowing sits at 6-9% APR depending on lender and term.

This calculator handles the four loan structures UK SMEs actually use:

1. Term loan (fixed monthly repayments) - Bank loan, alternative lender (Funding Circle, iwoca, Capital on Tap) - 1-7 year term typical - Pricing: base + 3-8% unsecured; base + 2-4% secured against property/assets - Amortisation formula: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]

2. Government-backed loans (RLS, GGS) - Up to £2M per business group (£1M cap for Northern Ireland Protocol borrowers), 6-year term - 70% government guarantee, but the borrower remains personally liable for the full debt - Pricing typically 6-9% APR

3. Invoice finance (factoring / discounting) - 80-90% advance against unpaid invoices - Costs: 0.5-2.5% of invoice value plus discount margin - Priced as a service fee, not an APR — annualised it's often 12-30%

4. Asset finance (HP, lease) - For equipment, vehicles, plant - 3-7 year term typical - Pricing 5-12% APR depending on asset and security

Plug loan amount, term, and rate into the calculator and it returns: - Monthly repayment - Total interest cost over term - Amortisation schedule (capital vs interest by month) - To sense-check affordability, divide the calculator's monthly repayment by your monthly EBITDA yourself; under 25% is generally comfortable

For comparable UK SME lending rates, the Bank of England's monthly Money and Credit statistical release publishes the average rate on new SME lending, and the British Business Bank's annual Small Business Finance Markets report covers regional benchmarks.

Worked example

UK term loan worked example. A Manchester wholesaler borrows £80,000 over 5 years at 11% APR (unsecured, base + a typical SME margin). Enter Loan Amount £80,000, Annual Interest Rate 11%, and Term 5 years. The calculator converts to a monthly rate of 0.11 ÷ 12 = 0.009167 and n = 60 months, then applies M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]. The Monthly Payment returns about £1,739. Total Loan Cost is roughly £104,360, of which the Total Interest figure is about £24,360 — shown as ~30.5% of the original loan. If the wholesaler's monthly EBITDA is £9,000, the £1,739 payment is about 19% of profit, inside the comfortable affordability range.

See the formula

See parent calculator at /business-loan-calculator for the full formula reference.

Frequently Asked Questions

Why is my UK loan's total interest higher than a headline rate suggests?

The calculator amortises a single APR over your term, so the total-interest figure already reflects compounding across every month — not a flat add-on. Headline rates from high-street banks often exclude arrangement and broker fees. Re-run the tool with the APR rather than the nominal rate to see the true sterling cost of the borrowing.

How do I model a government-backed Growth Guarantee Scheme loan here?

Enter the amount, the lender's quoted APR (typically lower than unsecured commercial pricing), and the term in years. The 70% government guarantee changes the lender's risk, not your repayment maths, so the monthly payment the calculator returns is exactly what you would pay. The guarantee does not reduce your personal liability for the full debt.

Does this calculator handle invoice finance or factoring costs?

No — it amortises a fixed-rate term loan with one APR and a set term. Invoice finance is priced as a service fee (a percentage of invoice value plus a discount margin), not an amortising APR, so it sits outside this tool. Use the monthly payment output only for term-loan, asset-finance, or government-scheme structures that repay on a fixed schedule.

How should I read the 'total interest as % of original loan' figure?

That percentage is total interest divided by principal, shown beside the result. On longer sterling terms it climbs steeply: the same loan over ten years can pay roughly double the interest of a five-year term. Treat it as a quick sense-check on whether stretching the term to lower the monthly payment is worth the extra lifetime cost.

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Methodology & sources

Rates last verified: May 2026

Read the full methodology →

Pre-fill rates are mid-range SME rates for each region: US SBA 7(a) ~7.5%, UK SME ~8.5%, SA prime + margin ~14.5%. Actual rates vary by lender, term, credit, and collateral. APR includes fees; lenders quoting headline rates may be missing fee components.

Primary sources

Rates are reviewed annually or when a region changes its headline rate. If you spot one that's out of date, email [email protected].

For information only. This calculator does not constitute financial, accounting, or tax advice. Consult a qualified professional before making business decisions.

Try these scenarios

Pre-filled examples — click any chip to load the inputs and result.

How to calculate business loan repayments

Enter loan amountTotal principal you intend to borrow.
Set the annual interest rate (APR)Pre-filled with the typical SME rate for your region — override with the actual rate you're being offered.
Set the loan termToggle between months or years, then enter the term length.
Read monthly payment and total costThe calculator shows the fixed monthly payment, total interest paid, and total cost over the full term.
Expand the amortisation scheduleClick to view the month-by-month breakdown of principal vs interest in each payment.

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Written by

James Blanckenberg

Founder, BusCalcTools

Founder of BusCalcTools and FinnCalc. Builds practical financial calculators for small business owners and freelancers across the US, UK, and South Africa.

Editorial review by: James Blanckenberg, Founder & Editor

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