Business Loan Calculator
On an equal-monthly-instalment basis, compute the monthly payment, total repayment and total interest for a business loan.
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At a glance:A business loan is funds borrowed by a company or sole proprietor for working capital, expansion, equipment or seasonal gaps. This calculator uses the common equal-instalment (annuity) method. r = annual rate / 12, n = years x 12; monthly payment = principal x r x (1+r)^n / ((1+r)^n - 1); total = payment x n; interest = total - principal. Example: HK$2,000,000 at 6% for 5y → monthly ~HK$38,665.60, total ~HK$2,319,936, interest ~HK$319,936. Check stable cash flow covers the payment; compare APR, fees and prepayment terms. WARNING: Assumes fixed rate/fixed payment; real loans may be floating, revolving or guaranteed, with arrangement/commitment fees raising true cost. Estimate only.
Formula
Loan amount = requested amount − deposit (floor at zero).
Monthly payment = P × r / (1 − (1 + r)^−n), r = annual rate / 12, n = term years × 12.
Total interest = monthly payment × n − P.
$$M = P \times \dfrac{r\,(1+r)^n}{(1+r)^n - 1}$$$$r = \dfrac{\text{annualRate}}{12},\quad n = \text{years} \times 12$$$$\text{Total} = M \times n,\quad \text{Interest} = \text{Total} - P$$How to Use
- Enter the loan principal.
- Enter the annual rate and term.
- View the monthly payment, total repayment and interest.
FAQ
Is the interest shown the full cost?
No. This calculates only interest at the nominal rate. Real business loans usually add arrangement, handling and commitment fees, and may need a personal guarantee or collateral. Compare the APR and all fees, not just the rate, to see the true cost.
How is a business loan different from a personal loan?
A business loan is in the company's name, needs financials and operating history, has higher limits and business use, with rate/terms by corporate credit and collateral; a personal loan is in your name, assessed on personal credit and income. Tax treatment and liability also differ.
What term should I pick?
Longer term lowers the monthly payment but raises total interest; shorter reverses it. Keep the payment comfortably covered by stable cash flow, while minimising the term to save interest, and keep a buffer for lean seasons.
What Hong Kong SME loan schemes exist?
The government runs several SME financing supports, e.g. the SME Financing Guarantee Scheme (SFGS) operated by the Hong Kong Mortgage Corporation Limited, with partial government guarantees to help SMEs borrow from participating banks; the TID also runs the SME Credit Guarantee Scheme. Rates, guarantee ratios and eligibility change, so check with participating institutions or the relevant departments for the latest.
Does early repayment save interest, and are there penalties?
Paying principal early reduces future interest on an annuity loan, theoretically saving overall. But many business loans have a prepayment penalty or lock-in; early clearance may incur penalty interest or fees that offset the saving. Read the prepayment clause before signing and check if it truly pays off.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.