Business Loan Calculator

What is a Business Loan?

A business loan is financing obtained by a company or entrepreneur to fund operations, expansion, equipment, inventory, or working capital. Unlike personal loans, business loans are evaluated on the business's revenue, profitability, collateral, and credit history. The total cost of a business loan — including interest, processing fees, and insurance — can significantly impact profitability and cash flow. Calculating monthly repayments accurately before applying is essential to ensure the business can comfortably service the debt from its revenue.

How to Use This Calculator

Enter the loan amount you need. Enter the annual interest rate offered by the lender — Pakistani banks typically offer business loans at 15–25% per annum depending on the borrower profile. Select the loan tenure from the dropdown. Click Calculate to see your monthly repayment, total repayment amount, total interest cost, and the interest as a percentage of the loan. Use this to compare offers from multiple lenders before committing.

💡 Pro Tips

• ✓A general rule: your monthly loan payment should not exceed 15–20% of your gross monthly business revenue.
• ✓Compare total interest cost across tenures — a shorter tenure has higher payments but significantly lower total cost.
• ✓Ask about early repayment penalties before signing — some lenders charge fees if you pay off early.
• ✓Processing fees, insurance, and collateral registration costs add to the true cost — factor these in.
• ✓Maintain a 3× interest coverage ratio: your EBIT should be at least 3× your annual interest payment.

Who Uses This Calculator?

SME owners evaluating financing before approaching a bank. Startup founders calculating whether projected revenue can service a startup loan. Accountants preparing loan feasibility reports. Business owners comparing bank loan offers against microfinance options. Entrepreneurs deciding between equity financing and debt financing based on repayment calculations.

Frequently Asked Questions