01 / START WITH YOUR NUMBERS
How to use the business loan calculator
Enter the cash the business receives
Use the amount available for the business, before considering the arrangement fee. The opening balance will be higher if you choose to finance that fee.
Use the annual interest rate
Enter a nominal annual interest rate, not an APR that already includes fees. Choose the term in whole years. The calculation assumes level repayments with the same rate throughout.
Choose how the fee is paid
Upfront payment adds the fee to the total cost but leaves the loan balance unchanged. Adding it to the loan spreads the fee across the term and charges interest on it too.
02 / THE NUMBERS IN PRACTICE
A worked example
The example gives a business £50,000 over five years at 8% annual interest, with a £1,000 arrangement fee paid upfront. Toggle the fee treatment to compare borrowing that fee instead.
£1,013.82
- Cash received
- £50,000.00
- Opening loan balance
- £50,000.00
- Arrangement fee
- £1,000.00
- Total interest
- £10,829.18
- Total borrowing cost
- £11,829.18
- Repayments plus upfront fee
- £61,829.18
Fixed illustration using the starting inputs, separate from the live calculator above. Displayed amounts are rounded.
Uses a nominal annual interest rate divided by 12, not an APR. The entered fee is separate so it is not counted twice. No tax relief, other fees or early repayments included.
03 / UNDERSTAND YOUR RESULT
Financing a fee has a second cost
If the business receives £50,000 and adds a £1,000 fee to borrowing, the opening balance is £51,000. The payment is calculated on £51,000, although only £50,000 is received for use. The extra balance also attracts interest.
If the same fee is paid upfront, the opening balance stays £50,000. The payment is lower, but £1,000 is paid separately at the start. The result includes that upfront amount once in the total, allowing the two approaches to be compared.
04 / UNDERSTAND YOUR RESULT
Put the repayment beside the business's cash flow
A fixed payment does not tell you when customer receipts will arrive or which months have larger costs. This tool does not model seasonality, working-capital movements, tax or missed payments. It is a starting point for a cash-flow forecast, not the forecast itself.
Before comparing actual quotes, check what the rate represents and how fees are collected. Also read any security or guarantee terms. Those contractual obligations are outside the arithmetic shown here, and the calculator does not assess business lending eligibility.
PLAIN ENGLISH, PLEASE
Business loan glossary
The terms behind the inputs and results, explained without the guesswork.
- Cash received
- The amount made available for the business's use in this model.
- Opening balance
- Cash received plus the arrangement fee if it is financed.
- Nominal annual rate
- The interest percentage before the effect of monthly compounding and without converting fees into an APR.
- Financed fee
- A charge added to the balance and repaid with interest over the term.
- Upfront fee
- A charge paid separately at the start rather than included in monthly repayments.
- Borrowing cost
- Total interest plus the arrangement fee. It excludes repayment of the cash received.
- Total paid
- All monthly repayments plus any arrangement fee paid upfront.
BEHIND THE ESTIMATE
How the calculation works
The monthly interest rate is annual interest ÷ 12. The financed opening balance is the cash amount plus a financed fee, if selected. We calculate equal repayments over years × 12 months.
Interest is all repayments less that opening balance. The total paid also includes an upfront fee where selected. Borrowing cost is total paid minus cash received, so the fee is counted once in either mode. Tax treatment, other charges, variable rates and early settlement are excluded.
Sources and further reading
Examples use Switcha’s calculation model above. Supporting information and linked guidance checked on 10 September 2026.