Business Loan Calculator for UK Businesses

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 (£1M for most SMEs), 6-year term - 70-80% 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) - Affordability check (repayment as % of monthly profit; aim for under 25% of monthly EBITDA for comfort)

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.