Business loan calculator
This calculator estimates what a UK business loan costs each month and in total. Enter the amount, the term in months and the annual interest rate, and it returns the monthly repayment, the total interest and the total you will repay, on 2026 figures. It models an amortising term loan, meaning equal monthly instalments with interest charged only on the balance still owed, which is how Funding Circle, iwoca and the government Start Up Loan actually repay. If you do not have a quote yet, tap a rate preset below to start from a real market anchor.
- a month
- total interest
- total repayable
Longer terms, smaller payments, more interest
Stretching a loan over more months lowers the monthly payment but raises the total interest, because the balance is charged for longer. The table below shows the same £25,000 loan at 11.9% APR over one to five years, so you can see the trade-off before you fix a term.
| Term | Monthly | Total interest | Total repayable |
|---|---|---|---|
| 1 year | £2,220.05 | £1,641 | £26,641 |
| 2 years | £1,175.67 | £3,216 | £28,216 |
| 3 years | £829.16 | £4,850 | £29,850 |
| 4 years | £657.12 | £6,542 | £31,542 |
| 5 years | £554.85 | £8,291 | £33,291 |
The three ways a business loan is priced
Two loans of the same headline percentage can cost wildly different amounts, because lenders price in three separate ways. Knowing which one you are quoted is the difference between a fair comparison and an expensive mistake.
- APR, or representative APR. Interest accrues on the reducing balance and the APR folds in compulsory fees, so it is the true annualised cost and the only figure that compares like for like. A representative APR is the rate at least 51% of accepted applicants receive, so yours can be higher. This is the model the calculator above uses.
- Flat rate. A flat rate charges interest on the original amount for the whole term and ignores the fact that you are paying it down, which makes it look cheaper than it is. As a rule of thumb a flat rate is roughly double the equivalent APR, so a 6% flat rate is nearer 11% to 12% APR. Always convert a flat quote to APR before you sign.
- Factor rate. Merchant cash advance and revenue-based finance charge a fixed multiplier on the amount advanced rather than interest. A factor of 1.25 on a £50,000 advance means you repay £62,500 in total, a £12,500 cost that is fixed at signing and does not fall if you clear it early. Repayment is taken as a share of your daily card takings, so it flexes with sales. That is why a factor-rate product cannot be dropped into this calculator.
Typical UK business loan rates in 2026
Unsecured business term loans sat around 10% to 15% APR in mid-2026, with the strongest applicants seeing rates from roughly 6.9% and newer or higher-risk borrowers paying 25% or more. Secured loans backed by an asset run cheaper. The four lenders behind most UK business-loan searches publish these headline figures.
| Lender | Product | Amount | Headline rate |
|---|---|---|---|
| Funding Circle | Unsecured or secured term loan, plus FlexiPay credit line | £10,000 to £750,000 | From 6.9% a year |
| iwoca | Flexi-Loan, a revolving business credit line | £1,000 to £1,000,000 | Representative 49% APR |
| Capital on Tap | Business credit card, not a term loan | Limits up to £250,000 | Representative 34.9% APR variable |
| YouLend | Revenue-based finance, repaid as a share of sales | Up to £2,000,000 | Priced by fixed fee, no APR |
Funding Circle ↗iwoca ↗Capital on Tap ↗YouLend ↗
Just starting out? The government Start Up Loan lends £500 to £25,000 at 7.5% fixed over 1 to 5 years, as an unsecured personal loan with up to 12 months of free mentoring. The fixed rate rose from 6% to 7.5% on 6 April 2026, so ignore any guide still quoting 6%. Apply on gov.uk ↗
What this calculator assumes
This tool models a fixed-rate amortising term loan repaid in equal monthly instalments, with the interest rate you enter treated as an annual APR. It does not model flat rates, factor-rate cash advances, revolving credit lines drawn in stages, early-repayment charges or variable rates that move with the Bank of England base rate. It is an estimate to size a decision, not a formal quote, so confirm the exact cost with the lender before you borrow. Rates and figures are checked against provider and gov.uk pages, most recently 4 July 2026.
Questions people actually ask
How do I calculate business loan repayments?
Monthly repayments on a business term loan come from three numbers: the amount borrowed, the annual interest rate and the number of months, run through a standard amortising formula where interest is charged only on the balance you still owe. Enter those three above and the calculator returns the monthly payment, the total interest and the total repayable. It assumes equal monthly instalments, which is how most UK term loans work.
What is a typical interest rate on a UK business loan in 2026?
A mainstream unsecured business term loan sits around 10% to 15% APR in 2026, with the strongest applicants seeing rates from about 6.9% and newer or higher-risk businesses paying 25% or more. Secured loans backed by an asset are usually cheaper. The government Start Up Loan is fixed at 7.5%, up from 6% on 6 April 2026.
What is the difference between a flat rate and APR?
A flat rate charges interest on the full original amount for the whole term, while APR charges interest only on the balance you still owe. Because you pay a loan down over time, a flat rate works out at roughly double the equivalent APR, so a 6% flat rate is nearer 11% to 12% APR. Convert any flat quote to APR before you compare lenders.
What is a factor rate on a business cash advance?
A factor rate is a fixed multiplier on the amount advanced, used by merchant cash advance and revenue-based finance instead of an interest rate. A factor of 1.25 means you repay £1.25 for every £1 borrowed, so a £50,000 advance repays £62,500 whatever the speed. This calculator does not model factor rates, because that cost is fixed at signing and does not fall if you repay early.
Does the calculator include arrangement fees?
The calculator works from the interest rate you enter, so it includes a fee only if you fold that fee into the rate. Many lenders quote a representative APR that already bundles compulsory fees, in which case the total is complete. Check whether your quote is a simple interest rate or a full APR before you rely on the figure.