Short term, higher rate
Cash flow loans are usually short, so you pay interest for fewer months, but rates on short-term business lending can be higher. Some lenders also charge fees, which this calculator doesn't include.
Interest is worked out each month on the balance you still owe, at one twelfth of the annual rate. Early payments are mostly interest; as the balance falls, more of each payment repays the loan.
Worked example
Borrowing £20,000 at 12% over 12 months costs £1,323.71 in interest. Over 6 months, the interest falls to £705.80, but the payment rises to £3,450.97 a month.
Compare the true cost
Some short-term lenders quote a fee or factor rate instead of an annual interest rate. Convert offers to the same basis, such as total cost, before comparing.
Inputs for the cash flow loan interest rate calculator
Amount to borrow
The amount the business needs.
Interest rate (per year)
The annual interest rate on your loan. The rate shown is only an example, so enter the rate from your quote.
Term
How many months you'll repay over. A longer term means paying interest for longer.
CALCULATOR QUESTIONS
Cash flow loan interest rate calculator questions
How much interest is on a short-term business loan?
Enter your figures above. For example, £20,000 at 12% over 12 months costs £1,323.71.
Does a shorter term save interest?
Yes, but the monthly payments are higher.
What's a factor rate?
A fixed multiple of the amount borrowed, used by some short-term lenders instead of an annual rate. Compare total costs.
Does this include fees?
No. Add any fees to see the full cost.