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Business Loan Calculator

Compute repayment schedule and total interest for business loans and financing.

Business growth and expansion - Max LTV: 80%, Typical Rate: 10%

One Crore Rupees Only

Enter the principal amount you want to borrow for your business
Annual interest rate charged by the lender
Loading currencies...
Loan repayment period (max 10 years for expansion)
Value of collateral offered
Initial payment amount
One-time processing fee charged by the lender

Enter business loan details and click Calculate to see results

Business Loan Calculation Formulas

Monthly EMI:
EMI = P × r × (1 + r)ⁿ / [(1 + r)ⁿ - 1]
if r ≠ 0, else EMI = P / n
Loan-to-Value (LTV) Ratio:
LTV = (Loan Amount / Collateral Value) × 100
Processing Fee:
Fee = P × (Fee%) / 100
Effective Rate (including processing fee):
Effective Rate = [(Total Interest + Processing Fee) / P] × (12 / n) × 100
P = Principal loan amount
r = Monthly interest rate (Annual rate ÷ 12 ÷ 100)
n = Total number of months
LTV = Loan-to-Value ratio
Business Loan Features: Higher loan amounts, longer tenures, collateral requirements, business-specific rates and terms. LTV ratios vary by business type and collateral quality.

About Business Loan Calculator

Business Loan Calculator: Your Guide to Smarter Business Financing

A business loan is a powerful financial tool that enables entrepreneurs, startups, and established companies to access the capital they need for growth, expansion, working capital, equipment purchase, or other business needs. Understanding the true cost of a business loan is crucial for making informed decisions and ensuring the long-term financial health of your business. Our Business Loan Calculator helps you estimate monthly EMIs, total interest, and repayment schedules, empowering you to plan your finances with confidence.

What is a Business Loan?

A business loan is a sum of money borrowed by a business from a lender, typically a bank, non-banking financial company (NBFC), or online lender, to meet various business requirements. Unlike personal loans, business loans are specifically designed to support business activities such as purchasing inventory, expanding operations, hiring staff, or managing cash flow. Business loans can be secured (backed by collateral) or unsecured (based on creditworthiness and business performance).

Types of Business Loans

Term Loans

Term loans are traditional business loans with a fixed repayment schedule and interest rate. They are ideal for funding large, one-time expenses such as equipment purchase, business expansion, or real estate acquisition.

Working Capital Loans

Working capital loans help businesses manage day-to-day operational expenses, such as payroll, rent, and inventory. These loans are typically short-term and help bridge cash flow gaps.

Equipment Financing

Equipment financing allows businesses to purchase or lease machinery, vehicles, or technology by spreading the cost over time. The equipment itself often serves as collateral for the loan.

Invoice Financing

Invoice financing lets businesses borrow against unpaid invoices, providing immediate cash flow while waiting for customers to pay. This is especially useful for businesses with long payment cycles.

Line of Credit

A business line of credit offers flexible access to funds up to a certain limit. Businesses can withdraw, repay, and redraw funds as needed, making it ideal for managing fluctuating cash flow.

SBA Loans (for US businesses)

Small Business Administration (SBA) loans are government-backed loans that offer favorable terms and lower interest rates to qualifying small businesses in the United States.

Merchant Cash Advance

A merchant cash advance provides a lump sum in exchange for a percentage of future sales. This option is suitable for businesses with high credit card sales but may have higher costs than traditional loans.

Microloans

Microloans are small, short-term loans designed for startups and small businesses that need limited capital. They are often provided by non-profits or government agencies.

Business Loan Eligibility Criteria

Lenders evaluate several factors to determine a business's eligibility for a loan. Meeting these criteria increases your chances of approval and helps you secure better terms:

Business Vintage
  • • Minimum 1-3 years of business operation
  • • Proof of business registration and licenses
Financial Performance
  • • Stable revenue and profitability
  • • Audited financial statements
  • • Satisfactory cash flow
Creditworthiness
  • • Good business and personal credit scores
  • • No major defaults or bankruptcies
Collateral (for secured loans)
  • • Property, equipment, or inventory as security
  • • Valuation and clear title required

Key Features of Business Loans

Flexible Loan Amounts

Business loans can range from a few thousand to several crores, depending on the size and needs of your business. Lenders assess your requirements, business plan, and repayment capacity before determining the loan amount.

Customizable Repayment Tenure

Repayment periods can vary from 12 months to 10 years or more. Shorter tenures mean higher EMIs but lower total interest, while longer tenures offer lower EMIs but higher total interest outgo.

Secured and Unsecured Options

Secured loans require collateral such as property, equipment, or inventory, often resulting in lower interest rates. Unsecured loans are based on creditworthiness and may have higher rates but do not require collateral.

Quick Disbursal

Many lenders offer fast approval and disbursal, especially for pre-approved customers or those applying online. Funds can be credited within a few days of approval.

Business Loan Interest Rates and Fees

Interest rates for business loans depend on factors such as loan type, business profile, credit score, collateral, and lender policies. Rates can be fixed or floating and typically range from 8% to 24% per annum. In addition to interest, lenders may charge processing fees, prepayment penalties, late payment charges, and other administrative costs. Always review the loan agreement for a complete list of fees.

Processing Fees
  • • Usually 1% to 3% of the loan amount
  • • Non-refundable, deducted upfront
Prepayment & Foreclosure Charges
  • • Fees for repaying the loan before tenure ends
  • • Typically 2% to 5% of outstanding principal
Late Payment Penalties
  • • Charged for missed or delayed EMI payments
  • • Can impact your credit score
Other Charges
  • • Documentation, legal, and valuation fees
  • • GST and other statutory charges

Business Loan Application Process

Step 1: Assess Your Needs

Determine the exact amount you need, the purpose of the loan, and your repayment capacity. Use our Business Loan Calculator to estimate EMIs and total costs for different scenarios.

Step 2: Compare Lenders

Research banks, NBFCs, and online lenders. Compare interest rates, fees, eligibility criteria, and customer reviews to find the best fit for your business.

Step 3: Gather Documentation

Prepare all required documents, including business registration, financial statements, tax returns, bank statements, and KYC documents for owners and directors.

Step 4: Submit Application

Complete the application form online or at a branch. Upload or submit all supporting documents. Some lenders offer instant approval for eligible applicants.

Step 5: Loan Processing & Disbursal

The lender will verify your documents, assess your business, and conduct credit checks. Upon approval, the loan amount is disbursed to your business account.

Essential Documents for Business Loan Application

Business Documents
  • • Business registration certificate
  • • GST registration
  • • Partnership deed or Memorandum & Articles of Association
  • • Business PAN card
Financial Documents
  • • Audited balance sheets and profit & loss statements (last 2-3 years)
  • • Income tax returns (last 2-3 years)
  • • Bank statements (last 6-12 months)
KYC Documents
  • • Identity and address proof of owners/directors
  • • Passport-size photographs
Collateral Documents (if applicable)
  • • Property papers, equipment invoices, or inventory lists
  • • Valuation and legal clearance certificates

Tips for Getting Your Business Loan Approved

Maintain a Good Credit Score

Pay all existing loans and credit card bills on time. A strong credit history increases your chances of approval and helps you secure better interest rates.

Prepare a Solid Business Plan

Lenders want to see a clear plan for how you will use the funds and repay the loan. Include financial projections, market analysis, and growth strategies.

Reduce Existing Debt

Lower your debt-to-income ratio by paying off outstanding loans and credit lines. This demonstrates financial discipline and repayment capacity.

Keep Financial Records Up to Date

Ensure all financial statements, tax returns, and bank records are accurate and up to date. Discrepancies or missing documents can delay or derail your application.

Choose the Right Loan Product

Select a loan type and tenure that matches your business needs and repayment ability. Avoid over-borrowing or choosing products with unfavorable terms.

How to Use Our Business Loan Calculator

Our Business Loan Calculator is designed to help you make informed borrowing decisions. Simply enter your desired loan amount, interest rate, and repayment tenure. You can also add processing fees and select between years or months for tenure. The calculator instantly displays your estimated EMI, total interest, total repayment amount, and a detailed amortization schedule. Visual charts help you understand the breakdown of principal and interest over time, making it easy to compare different loan scenarios.

  • Adjust the loan amount and tenure to see how your EMI changes
  • Compare secured vs. unsecured loan options
  • Factor in processing fees for a more accurate total cost
  • Download or copy the amortization schedule for your records

Benefits of Using a Business Loan Calculator

Accurate Financial Planning

Instantly estimate your monthly payments and total loan cost, helping you plan your business cash flow and avoid surprises.

Compare Multiple Scenarios

Test different loan amounts, tenures, and interest rates to find the most affordable and suitable option for your business.

Visualize Repayment Schedule

View detailed charts and tables showing how your principal and interest payments change over time, and how quickly you can pay off your loan.

Make Informed Decisions

Understand the impact of fees, prepayment, and different loan products before committing, ensuring you choose the best financing solution.

Common Mistakes to Avoid When Taking a Business Loan

  • Borrowing more than your business can repay, leading to financial stress
  • Ignoring the total cost of the loan, including fees and penalties
  • Not comparing offers from multiple lenders
  • Overlooking the importance of a strong business plan and financial records
  • Failing to read the loan agreement carefully
  • Missing EMI payments, which can damage your credit score

Alternatives to Business Loans

Equity Financing

Raise capital by selling shares in your business to investors or venture capitalists. This option does not require repayment but involves sharing ownership and profits.

Government Grants & Subsidies

Many governments offer grants, subsidies, and incentives for startups and small businesses. These funds do not require repayment and can reduce your financing burden.

Angel Investors & Crowdfunding

Secure funding from angel investors or through crowdfunding platforms. These sources can provide capital and valuable business guidance.

Trade Credit & Supplier Financing

Negotiate extended payment terms with suppliers or use trade credit to manage cash flow without taking on debt.

Responsible Borrowing: Best Practices

  • Borrow only what you need and can comfortably repay
  • Maintain a healthy credit profile and financial discipline
  • Monitor your business cash flow and adjust spending as needed
  • Plan for contingencies and maintain an emergency fund
  • Communicate with your lender if you face repayment difficulties

Conclusion: Empower Your Business with Smart Financing

Business loans are a vital resource for entrepreneurs and companies seeking to grow, innovate, or manage cash flow. By understanding the different types of business loans, eligibility criteria, and the true cost of borrowing, you can make informed decisions that support your business goals. Use our Business Loan Calculator to compare options, plan your repayments, and avoid costly mistakes. With the right financing and responsible management, your business can thrive and achieve new heights of success.

Frequently Asked Questions

What is a business loan?
A business loan is a sum of money borrowed by a business from a lender to fund various business needs such as expansion, working capital, equipment purchase, or inventory.
How does a business loan calculator work?
A business loan calculator estimates your monthly EMI, total interest, and repayment schedule based on the loan amount, interest rate, tenure, and fees you input.
What are the types of business loans?
Common types include term loans, working capital loans, equipment financing, invoice financing, lines of credit, merchant cash advances, and microloans.
Who is eligible for a business loan?
Eligibility depends on business vintage, financial performance, credit score, and sometimes collateral. Most lenders require at least 1-3 years of business operation and stable revenue.
What documents are required for a business loan?
Typical documents include business registration, GST certificate, financial statements, tax returns, bank statements, KYC documents, and collateral papers if applicable.
How is EMI calculated for business loans?
EMI is calculated using the formula: EMI = P × r × (1 + r)^n / ((1 + r)^n - 1), where P is principal, r is monthly interest rate, and n is total months.
What is the typical interest rate for business loans?
Interest rates vary from 8% to 24% per annum, depending on the lender, loan type, business profile, and collateral.
Are business loans secured or unsecured?
Both options exist. Secured loans require collateral and usually have lower rates. Unsecured loans are based on creditworthiness and may have higher rates.
What is a processing fee?
A processing fee is a one-time charge by the lender for processing your loan application, usually 1-3% of the loan amount.
Can I prepay my business loan?
Yes, most lenders allow prepayment or foreclosure, but may charge a penalty, typically 2-5% of the outstanding principal.
How long does it take to get a business loan approved?
Approval can take from a few hours (for online lenders) to several days, depending on documentation and lender policies.
What is the maximum tenure for a business loan?
Business loan tenures typically range from 12 months to 10 years, depending on the loan type and lender.
What is a business loan amortization schedule?
An amortization schedule shows the breakdown of each EMI into principal and interest, and the remaining balance after each payment.
How much can I borrow with a business loan?
Loan amounts range from a few thousand to several crores, based on business needs, financials, and lender policies.
What is a line of credit?
A business line of credit is a flexible loan that allows you to withdraw, repay, and redraw funds up to a set limit as needed.
What is invoice financing?
Invoice financing lets you borrow against unpaid invoices, providing immediate cash flow while waiting for customers to pay.
How does collateral affect my business loan?
Providing collateral can help you secure a larger loan at a lower interest rate, but puts your asset at risk if you default.
What is the difference between fixed and floating interest rates?
Fixed rates remain constant throughout the loan term. Floating rates can change based on market conditions, affecting your EMI.
Can startups get business loans?
Some lenders and government schemes offer loans to startups, but eligibility may require a solid business plan and financial projections.
What is a merchant cash advance?
A merchant cash advance provides a lump sum in exchange for a percentage of future sales, suitable for businesses with high card sales.
How do I improve my chances of business loan approval?
Maintain a good credit score, keep financial records up to date, reduce existing debt, and prepare a strong business plan.
What happens if I miss an EMI payment?
Missing an EMI can result in penalties, increased interest, and a negative impact on your business and personal credit scores.
Are there government schemes for business loans?
Yes, many governments offer subsidized loans, grants, and guarantees for small businesses and startups.
What is the difference between a business loan and equity financing?
A business loan must be repaid with interest, while equity financing involves selling shares and sharing profits but no repayment.
Can I get a business loan with bad credit?
It is possible, but you may face higher interest rates, lower loan amounts, or need to provide collateral or a guarantor.
What is refinancing a business loan?
Refinancing means replacing your existing business loan with a new one, usually to get a lower interest rate, better terms, or higher loan amount.
Can I use a business loan for any purpose?
Most business loans can be used for a variety of business purposes, but some lenders may restrict usage to specific needs like equipment, inventory, or working capital.
What is a business loan top-up?
A top-up loan allows you to borrow additional funds on your existing business loan, subject to eligibility and lender approval.
How does my credit score affect my business loan?
A higher credit score increases your chances of approval and helps you secure lower interest rates. Poor credit may result in higher rates or rejection.
What is a business loan EMI bounce charge?
An EMI bounce charge is a penalty imposed when your EMI payment fails due to insufficient funds in your account.
Can I transfer my business loan to another lender?
Yes, you can transfer your business loan to another lender through a process called balance transfer, often to get better rates or terms.
What is the difference between a business loan and a personal loan?
A business loan is meant for business purposes and may require business documents, while a personal loan is for individual needs and is based on personal credit.
How do I calculate the total cost of a business loan?
Total cost = Principal + Total Interest + Processing Fees + Other Charges. Use the calculator to see a detailed breakdown.
What is a business loan sanction letter?
A sanction letter is an official document from the lender stating the approved loan amount, interest rate, tenure, and terms and conditions.
Can I get a business loan without collateral?
Yes, many lenders offer unsecured business loans based on your creditworthiness and business performance.
What is the minimum turnover required for a business loan?
Minimum turnover requirements vary by lender, but many require at least ₹10-50 lakhs annual turnover for eligibility.
How do I check my business loan status?
You can check your loan status online through the lender's portal, by contacting customer service, or visiting the branch.
What is a business loan repayment holiday?
A repayment holiday is a period during which you are not required to make EMI payments, usually offered at the start of the loan. Interest may still accrue.
Can I get tax benefits on business loan interest?
Yes, interest paid on business loans is generally tax-deductible as a business expense, reducing your taxable income.
What is a business loan foreclosure?
Foreclosure means repaying the entire outstanding loan amount before the end of the tenure, often subject to a penalty.
How do I choose the best business loan for my needs?
Compare interest rates, fees, eligibility, tenure, and customer reviews. Use the calculator to compare total costs for different options.
What is a business loan guarantor?
A guarantor is a person or entity who agrees to repay the loan if the borrower defaults, improving your chances of approval.
Can I get a business loan if my business is new?
Startups may face stricter eligibility, but some lenders and government schemes offer loans to new businesses with strong plans.
What is the impact of missed payments on my business credit score?
Missed payments can significantly lower your business credit score and affect your ability to get future loans.
How do I avoid business loan rejection?
Maintain good credit, provide accurate documents, reduce existing debt, and apply only to lenders whose criteria you meet.
What is a business loan EMI calculator?
An EMI calculator helps you estimate your monthly payments, total interest, and repayment schedule for a business loan.
Can I negotiate business loan terms with the lender?
Yes, you can negotiate interest rates, fees, and repayment terms, especially if you have a strong credit profile or existing relationship.
What is the difference between working capital loan and term loan?
A working capital loan is for short-term operational needs, while a term loan is for long-term investments and has a fixed tenure.
How do I use the business loan calculator for comparison?
Input different loan amounts, tenures, and rates to compare EMIs, total interest, and total repayment for each scenario.
What are the risks of taking a business loan?
Risks include over-borrowing, inability to repay, loss of collateral, and negative impact on credit score if you default.
Can I get multiple business loans at the same time?
Yes, but lenders will consider your existing obligations and repayment capacity before approving additional loans.
What is the role of CIBIL or credit bureaus in business loans?
Credit bureaus track your repayment history and credit score, which lenders use to assess your loan eligibility and terms.
How do I contact my lender for business loan support?
You can reach out via customer care, email, online chat, or by visiting the nearest branch.
What is the difference between business loan and overdraft facility?
A business loan is a lump sum with fixed EMIs, while an overdraft allows you to withdraw funds as needed up to a limit, with interest charged only on the used amount.
How do I close my business loan account?
Repay the outstanding amount, obtain a no-dues certificate, and ensure the closure is updated with credit bureaus.

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