How the deposit sets the size of the loan
The loan is the purchase price less your deposit. Loan to value (LTV) is the loan divided by the price, so a 20% deposit means an LTV of 80%. This calculator then runs the same business term loan arithmetic as the main business loan calculator on that smaller loan, so the two pages agree to the penny when the loan amount is the same.
You can enter the deposit as a percentage of the price or as a fixed amount. Choose which one the calculator uses in the first selector, and it ignores the other field. It also shows the cash you need on day one, which is the deposit plus any fees you pay in cash rather than borrow, because the deposit is rarely the only money a lender wants up front.
Worked example: a £62,500 purchase with a 20% deposit
Buy equipment for £62,500 with a 20% deposit. The deposit is £12,500.00, so you borrow £50,000.00 and the loan to value is 80.00%. Take an 8% nominal rate over five years, repaid monthly, with a 2% arrangement fee deducted from the loan. You receive £49,000.00 and repay £1,013.82 a month for 60 months.
Total interest is £10,829.18. With the £1,000.00 arrangement fee, the total cost of borrowing is £11,829.18, which is 23.66% of the loan. The APR, which includes the fee, is 9.23%, above the 8% rate. The purchase price plus the cost of borrowing comes to £74,329.18.
What a bigger deposit saves
The comparison table in the results shows the same loan at five fixed deposits, using your rate, term and fees. On the example above, borrowing the whole £62,500 with no deposit costs £1,267.27 a month and £14,786.48 in total interest and fees. A 40% deposit leaves a loan of £37,500.00, a repayment of £760.36 and a total cost of £8,871.89.
The deposit itself is not a cost of borrowing, but it is money you no longer have. A 40% deposit is £25,000.00 of your own cash, against £12,500.00 at 20%. Compare the lower repayment with what that cash could do elsewhere in the business, for example as working capital.
A percentage or a fixed amount
If a supplier or lender quotes the deposit in pounds, choose a fixed amount. On a £80,000 purchase with a £15,000 deposit at 7.5% over six years, the loan is £65,000.00 and the LTV is 81.25%. The repayment is £1,123.86 a month, the total cost of borrowing is £17,217.73 and the APR is 8.54%. The deposit must be less than the price, and the loan must be at least £1.
Fees and the cash you need at the start
Fees can be deducted from the loan, added to it or paid separately. On a £250,000 premises purchase with a 30% deposit, a 1.5% arrangement fee paid separately, £900 of legal and valuation fees and a £15 monthly account fee, the deposit is £75,000.00 and the loan is £175,000.00. The fee and legal costs add £3,525.00 in cash, so you need £78,525.00 on day one.
At 6.9% over 15 years the repayment, including the monthly account fee, is £1,578.18. The APR with all of these costs is 7.64%.
Interest-only start, overpayments and settling early
Some lenders allow interest-only repayments at the start. On a £75,000 purchase with a 15% deposit over four years and six interest-only months, you pay £425.00 a month at first and then £1,745.28, because the balance has not fallen in the meantime.
To see the effect of overpaying, enter an extra amount and an early settlement. On a £90,000 purchase with a 20% deposit over seven years, paying £100 extra each month clears the loan in 76 months and saves £2,517.87 of interest. Settling after 24 months with a 3% early repayment charge means repaying £52,752.19 plus a £1,582.57 charge, for a total cost of £13,107.74 to that point.
What this estimate leaves out
Lenders set their own deposit, loan to value and security requirements, and may base the loan on a valuation rather than the price you pay. This calculator does not check eligibility, model a variable rate, or include VAT, stamp duty, insurance or the lender's own charges beyond the fees you enter. Fixed-rate figures in your offer are the ones that count.
To start from the loan amount instead of a purchase price, use the business loan calculator .
For equipment bought on hire purchase or a lease, see the asset finance calculator .
Use the right country page
This page stays in pounds and uses UK terms: deposit, arrangement fee, flat rate and APR as the effective annual rate. The country choices above the inputs open separate local pages. Choosing United States opens the business loan down payment calculator, which uses a down payment, an origination fee and a nominal APR. The inputs reset and amounts are not converted.
Inputs for the business loan deposit calculator
Purchase price
What the asset or property costs, before any deposit.
Deposit is
Choose whether the deposit comes from the percentage field or the fixed amount field.
Deposit percentage
Used when you choose a percentage. 20 means a fifth of the price.
Deposit amount
Used when you choose a fixed amount. It must be less than the price.
Rate type
Use nominal unless your quote says APR or flat rate. Flat rates charge interest on the full amount throughout.
Quoted rate
The yearly rate from your quote. Choose its type above.
Term in
Enter the loan term in years or in months.
Term
How long you will take to repay the loan. Up to 30 years, or up to 360 months.
Repayments
Monthly, fortnightly or weekly. More frequent repayments reduce the balance faster.
Interest-only period at the start
Months at the start when you pay only interest. Enter zero for none.
Arrangement fee
A percentage of the loan amount, from your quote. Enter zero if none.
Arrangement fee is
Deducted means you receive less. Added means you pay interest on it. Separate means you pay it in cash.
Fee with each repayment
A fixed account or servicing fee charged with every repayment. Enter zero if none.
Legal, valuation and other fees
Fixed costs paid in cash at the start. Do not repeat the arrangement fee here.
Extra paid with each repayment
An overpayment added to every repayment after any interest-only period. Enter zero for none.
Settle the loan after
Repay the whole balance after this many months to see the cost. Zero runs to the end of the term.
Early repayment charge
A percentage of the balance you repay early. Enter zero if none.
CALCULATOR QUESTIONS
UK business loan deposit calculator questions
How do I calculate a business loan with a deposit?
Subtract the deposit from the purchase price to get the loan, then work out the repayment on that loan. A £62,500 purchase with a 20% deposit is a £50,000 loan, and at 8% over five years the repayment is £1,013.82 a month.
How much deposit should I put down on a business loan?
It depends on the lender and the asset, so ask for the lender's minimum in writing. Use the comparison table to see how the repayment and total cost change at 0%, 10%, 20%, 30% and 40%.
What is loan to value on a business loan?
The loan divided by the purchase price or valuation, as a percentage. A £50,000 loan on a £62,500 purchase is an LTV of 80.00%.
Is the deposit included in the cost of borrowing?
No. The deposit reduces the loan, so it lowers the interest, but it is your own money rather than a cost of the loan. The calculator shows the price plus the cost of borrowing so you can see both.
Can I enter the deposit as a fixed amount instead of a percentage?
Yes. Choose a fixed amount in the first selector and enter it in pounds. The deposit must be less than the price.
Does the calculator include an arrangement fee in the APR?
Yes. The APR includes the arrangement fee and any other fees you enter, so it is higher than the interest rate. On the example loan the APR is 9.23% against an 8% rate.
What happens when I change country?
The United States option opens the separate business loan down payment calculator, in dollars, with an origination fee and a nominal APR. Your inputs are reset rather than converted.