### Amortisation Schedule

Year Remaining Balance Monthly Repayment Interest Paid Ending Balance
\$0.00 \$0.00 \$0.00 \$0.00 \$0.00

## How to use the Business Loan Calculator

To use the business loan calculator, you’ll need to enter some details about your loan. These are explained below:

• Loan Amount — The amount of money you will be borrowing from a lender under a business loan agreement.
• Interest Rate — This is fixed interest rate the lender will apply to your business loan. A fixed interest rate will allow you to accurately assess your estimated repayments.
• Establishment Fees — Establishment fees are the upfront fees charged by the lender when creating the business loan agreement.
• Loan Term — The length of your business loan as dictated by your business loan agreement. The loan term is important as it will be used in repayment calculations to determine the amount of interest you will pay over time.

Once you have filled in your business loan details, simply click ‘See My Repayments’ to view an estimated repayment amount. You can then select Monthly, Fortnightly, or Weekly repayments to see what your repayment amount will be at various frequencies.

The business loan calculator uses amortisation calculation to determine your repayment amounts. Amortisation provides a more accurate representation of repayments as it is used to assess the amount of interest you will pay over a set period.

A business loan is generally offered for a fixed rate over a fixed term. A fixed rate is an interest rate that remains constant for the term of your loan, as opposed to a variable interest rate, which may change due to various economic influences.

Your business loan repayments will need to cover both the interest and principal amount of your loan. When you first make repayments on your business loan, a larger portion of the repayment amount will be used to cover the interest over the principal. This is because your repayments will be based on the total amount of money still loaned to you by the lender.

When expressed a mathematical formula, the repayment calculation can seem somewhat complex. However, once you understand how interest is calculated on a loan amount over time, you may even be able to perform the calculations yourself.

The simple formula for calculating Loan Repayments is: Loan Amount / Discount Factor

Where many people struggle with these calculations is in finding the discount factor, which is calculated by dividing the interest rate of your loan by the number of payments per year (12 for monthly, 26 for fortnightly, or 52 for weekly) to first obtain the Periodic Interest Rate.

The formula is expressed as: (((1 + i) ^n) - 1) / (i (1 + i)^n)

• n = the number of repayments
• i = the annual interest rate

To show how this complex formula can be easily understood, we’ve presented a simple example below.

### Example of Monthly Business Loan Repayments

Business Loan Amount5% Interest7.5% Interest10% Interest
\$10,000\$188.71\$200.38\$212.47
\$20,000\$377.42\$400.76\$424.94
\$30,000\$566.14\$601.14\$637.41
\$40,000\$754.85\$801.52\$849.88
\$50,000\$943.56\$1,001.90\$1,062.35
\$60,000\$1,132.27
\$1,202.28\$1,274.82
\$70,000\$1,320.99
\$1,402.66 \$1,487.29
\$80,000\$1,509.70
\$1,603.04\$1,699.76
\$90,000\$1,698.41
\$1,803.42 \$1,912.23
Business loan repayment examples are calculated using monthly repayments with a fixed interest rate on a 5-year term. They do not include any fees that may be charged by a lender in addition to interest.

## Business Loan Calculator – repayment example

In the example below, we’ll use a \$30,000 loan with a fixed 9% interest rate, repaid monthly over 3 years:

• n = 36 (12 repayments per year for 3 years)
• i = 0.0075 (where the interest rate (9%) is divided by the number of annual payments (12) to provide a decimal representation of the interest rate)
• Using the discount factor formula above, we can calculate the discount factor: ((((1+0.0075)^36) - 1) / (0.0075(1+0.0075)^36)) = 31.4468
• The discount factor is then calculated as 31.4468
• We then take our loan amount (\$30,000) and apply the Loan Repayment Formula, dividing the loan amount by the discount factor. This will provide your monthly repayments: 30,000 / 31.4468 = 953.99
• Your monthly repayments on this loan will be \$953.99

If you want to quickly calculate your repayments without creating your own spreadsheet with the above calculations, you can use our free business loan calculator.

### Other Money.com.au Calculators

Calculated your Business Loan Repayments and need to make other types of finance calculations? We have a range of Money.com.au calculators for almost any situation — you can visit our dedicated page to view the full list of financial calculators. You can use these calculators to estimate your weekly or monthly pay, how much tax you'll need to pay on capital gains, and much more.

To qualify for a business loan with most lenders, you will need an Australian Business Number, a GST-registered business operating for a minimum of six months, permanent residency or Australian citizenship, and business bank statements you can provide to the lender. However, you can still qualify for a business loan with some lenders if you are self-employed, a sole trader, or are unable to provide business bank statements.

There are many types of business loans offered by lenders in Australia, each with varying interest rates. The best interest rates for a business loan are offered on secured forms of business finance. Business loan interest rates in Australia can be as low as 4.40% with a traditional bank loan and as high as 40% with a bad credit business loan.

You can borrow any amount of money with a business loan, but higher amounts will only be approved for businesses with high revenue and stable trading history. The amount you can borrow with a business loan will also depend on the type of loan you apply for, and the lender’s credit limits. The average business loan in Australia is \$30,000.

Yes, you can get a business loan if you have bad credit. Bad Credit Business Loans in Australia are available if you are an ex-bankrupt and discharged for a minimum of six months, are in a Part IX agreement, or if your business assets cannot be accessed.