A business loan repayment calculator shows UK SMEs their monthly repayments, total interest payable, and overall cost of borrowing based on loan amount, interest rate, and repayment term. UK small business loan rates currently range from 3% to 15% APR depending on whether the loan is secured against assets, the business’s trading history, and the lender type — with high-street banks typically offering 5% to 8% for established businesses and alternative lenders charging 8% to 15% for newer or higher-risk applicants. A £50,000 secured business loan at 6% APR over 5 years produces monthly repayments of approximately £966 and total interest of £7,960, while the same amount unsecured at 12% over 3 years costs £1,660 per month with £9,760 in total interest. Loan terms span 1 to 25 years, with most SME term loans falling between 2 and 7 years. This calculator helps you compare scenarios before approaching lenders with a clear understanding of affordability.
A £50,000 business loan at 9.5% APR over 5 years costs £1,050/month, with £13,000 in total interest. At the same rate over 3 years, monthly payments rise to £1,602 but total interest falls to £7,660 — saving over £5,300 by repaying faster.
How to Use This Calculator
Enter the loan amount — input the total amount you wish to borrow, typically between £1,000 and £500,000 for SME term loans.
Set the interest rate — enter the APR quoted by your lender, or use the range of 5% to 12% to model different scenarios.
Choose the repayment term — select the loan duration in years; most SME loans run from 1 to 7 years.
Review your repayment schedule — see your fixed monthly repayment, total interest payable, and overall cost of the loan across the full term.
UK Business Loan Rates in 2026
UK business loan rates range from around 4–6% for secured lending with excellent credit to 15–25%+ for unsecured short-term loans with limited trading history. Most SME loans fall between 7% and 15% APR.
The rate you receive depends heavily on: how long you have been trading (lenders typically want 2+ years), your turnover, credit score, whether you can offer security, and the specific lender. Online lenders tend to be faster than banks but charge higher rates. High street banks offer the lowest rates but take longer and have stricter criteria.
Equal Instalments vs Interest Only vs Straight-Line
Equal instalments (annuity) give fixed, predictable payments — the most common structure. Interest-only minimises monthly outgoings but leaves capital to repay at the end. Straight-line repayments start high and decrease each month as the capital balance falls.
For a £50,000 loan at 9.5% over 5 years, the three structures compare as follows:
- Equal instalments: £1,050/month throughout. Total interest: £13,000. Predictable, suits businesses with stable cashflow.
- Interest only: £396/month (interest only), then £50,000 capital repayment at end. Total interest: £23,750. Lowest monthly cost but highest total cost — requires capital at the end.
- Straight-line: £1,229/month in month 1 falling to £840 in month 60. Total interest: £11,875. Lowest total interest, highest initial payment, but payments fall over time.
The True Cost of Arrangement Fees
Arrangement fees of 1–3% are common on UK business loans. On a £100,000 loan, a 2% arrangement fee adds £2,000 to your true borrowing cost before interest. Always factor fees into the APR comparison when choosing between lenders.
Lenders are required to disclose the APR (Annual Percentage Rate) on consumer credit, but business lending has fewer disclosure requirements. This makes it important to calculate the total cost of borrowing yourself, including:
- Arrangement fee: 1–3% upfront or capitalised into the loan
- Early repayment charges: Often 1–2 months’ interest for repaying early
- Annual review fees: Some revolving credit facilities charge annual renewal fees
- Security valuation costs: For secured loans requiring property or asset valuation
Use the calculator above to compare the total cost of different loan offers, not just the monthly payment. Two loans with the same monthly payment can have very different total costs if one has a higher rate and shorter term versus a lower rate and longer term.
Choosing a 3-year term over 5 years for a £50,000 loan at 9.5% APR saves over £5,300 in total interest - but monthly payments increase by £552. Match the term to your cashflow, not just the total cost.
How to Get the Best Business Loan Rate
The most effective way to get a lower business loan rate is to compare at least 3 lenders, have 2+ years of clean filed accounts, offer security if you can, and apply for the right loan type for your purpose (e.g., asset finance for equipment rather than unsecured loans).
Practical steps to improve your loan terms:
- Compare multiple lenders: High street banks, challenger banks (OakNorth, Allica, Cynergy), government-backed lenders (British Business Bank), and online lenders all price risk differently
- Use asset finance for equipment: Financing assets against the asset itself (hire purchase, finance lease) typically gets lower rates than unsecured lending
- Consider the British Business Bank: ENABLE Guarantee and Recovery Loan Scheme lenders offer better rates for viable businesses
- Borrow the right amount: Larger loans often get better rates. Borrowing slightly more at a lower rate can sometimes be cheaper than a smaller loan at a higher rate
- Prepare your numbers: 3 years of accounts, management accounts, cashflow forecast, and a clear purpose all reduce perceived risk and improve rate offers
Loan Repayment Comparison: Common Scenarios
The table shows monthly repayments and total interest for common UK business loan amounts at typical APR ranges.
| Loan Amount | APR | Term | Monthly Payment | Total Interest |
|---|---|---|---|---|
| £10,000 | 8% | 3 years | £313 | £1,282 |
| £25,000 | 9% | 3 years | £795 | £3,607 |
| £25,000 | 9% | 5 years | £519 | £6,117 |
| £50,000 | 9.5% | 3 years | £1,602 | £7,659 |
| £50,000 | 9.5% | 5 years | £1,050 | £12,987 |
| £100,000 | 10% | 5 years | £2,125 | £27,481 |
| £250,000 | 8% | 5 years | £5,069 | £54,124 |
Based on fixed-rate repayment loans. Actual rates vary by lender, credit profile, and security.
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