At the moment the economy in the UK as elsewhere around the globe is at a relative standstill and growth is not forecast in the near future. Whilst businesses are going under on a daily basis, others do what they can to survive these trying economic times. One way small businesses are accomplishing this is to take out a small business loan in order to continue day to day operations until the economy improves.
In fact, the Chancellor has said that small businesses are the hope of the UK’s future and has further stated that more government guaranteed loans would be made available to small businesses in the UK. If you are looking for a business loan, you will surely need to know what the interest rates are and how much you will be paying in interest before obligating to a loan which may put you further in the red. A Business Loan Calculator can help you determine how much that loan will be costing your firm and whether or not it is a sound business decision.
What Is a Business Loan Calculator?
Of course many businesses employ an on-staff accountant, but small to medium enterprises usually don’t have that kind of budget to keep a highly paid accountant on staff. If you are looking to quickly calculate the bottom line on a business loan, you can use a simple online software program that will give you all the information you need quite quickly.
A Business Loan Calculator is easy to use and all you need to do is read the questions on your computer screen, plug in a few values in the fillable boxes and hit a calculate button. That is all there is to it. The program does the complex calculations for you and within moments you will see how much that loan is really going to cost you.
Information Needed for a Business Loan Calculator
Whether or not you know the exact amount you would like to borrow isn’t so important in the beginning because you can play around with numbers to see how much your firm can ‘afford’ to borrow. You may need £100,000 to stay solvent, but perhaps £125,000 would allow for some growth. By using an online Business Loan Calculator you can keep changing the value if needed until you find a loan amount that is feasible.
With that being said, you will need the loan amount, the interest rate and the term of the loan (period of repayment). Sometimes a Business Loan Calculator is based on fixed interest rates but there are more complex versions which take variable interest into account. However, it may be in your best interest from a business perspective to take out a fixed interest loan so that you are locked into that rate for the entire term of the loan.
Once you know the loan amount, interest rate and the term you will be able to get a monthly repayment amount. You may find a Business Loan Calculator that tells you the entire amount the loan will be costing you and you may find a simple version which simply gives you that monthly repayment amount. In either case, take the time to look at your options by using a Business Loan Calculator before finalising any loans. In this way you will know that you are making the best decision for the ongoing welfare of your enterprise.