To take on business finance to acquire vehicles, trucks and equipment, plant and machinery is a major consideration. Many business operators may need to prepare financial projections and cash flow forecasts to plan the acquisitions in their operational expenditure. Key personnel may need to prepare budgets and proposals detailing ROI and expected productivity and performance outcomes from the acquisition for senior management and board approval. Most business owners, especially SMEs and sole traders need to work out if they can afford the purchase.
Differing purposes and objectives but with one common thread – buyers primarily need and want to know what their finance repayments maybe when acquiring major assets. They need to be able to quickly and easily convert the purchase price of the equipment or vehicle into monthly repayments for inclusion in planning documents or to rule goods in or out of their affordability range. Read more here.
That process is made easy and without any high-level maths or computational skills with the use of online loan calculators. To further simplify the process even further, we have provided two lending tools on our website for your use.
These loan tools are a must-have resource for all business owners seeking finance for a range of business requirements. While the basic operation is straightforward, we are providing more advanced directions to assist you to maximise your experience in using this loan tool.
Range of Business Finance Products
While some calculators will be set up by providers specifically to calculate only their products or for their finance deals, we have provided a calculator for generating repayments across an extensive range of loans. As we provide financial information for both general business loans as well as asset acquisition finance, our interest rate calculator is set up for all these loans.
Use our interest rate calculator to generate repayment estimates for:
- Chattel Mortgage
- Equipment Loans for Businesses
- Secured Business Loans on older equipment
- Secured and Unsecured Business Loans
- Commercial Hire Purchase
- Operating Leases
- Rent to Own
- Non-bank Lender Overdraft
The interest rate achievable for each of these financial products is displayed and the calculator auto-calculates the results for each loan category.
Using Business Loan Calculators
Loan calculators are widely available. Banks, finance companies, non-bank lenders and even equipment manufacturers and vehicle dealers now provide a loan calculator on their website. They are set up in standard online form format with fields or boxes where the user can input or type in, data or information about their loan.
Before starting you will need to have:
- An idea of the amount you would like for your loan. It doesn’t need to be exact as we will be giving you some tips on varying the loan amount.
- Source the price of the equipment or vehicles you are interested in purchasing or settle on an amount you need for a general business loan or overdraft.
- You can use the calculator for as many items as you want, so source as many prices on different makes and models as you like.
- If purchasing assets, review the finance products we offer to decide which would best suit your objectives.
- Have a pen and notepad handy to record the results generated as the calculator does not have a memory to store your calculations.
Using the Business Loan Interest Rate Calculator
The business loan interest rate tool allows you to compare repayments across the full range of finance products. Enter the loan amount and term and note the results displayed. This is extremely useful if you are undecided between say Leasing and Chattel Mortgage.
The interest rates on different finance products vary as you will see. While selecting the product with the lowest rate may appear a sensible way to go, the full range of benefits of each loan type should be considered in the context of individual business objectives. A discussion with an accountant is strongly recommended.
Utilising the Power of the Business Loan Calculator
The other is the free online business loan repayment calculator. This has an additional feature to the interest rate calculator – the ability to include a balloon or residual. This is the amount set aside for payment at the end of the finance term.
- Follow the same basic steps with this calculator but include an amount you would like as a balloon. Don’t deduct the balloon amount from the total loan amount entered. The calculator does that automatically.
- Once you have the basic data entered it’s time to start working on the figures to decide how you would like your finance deal structured.
- Additional items such as commissioning and installation of equipment, optional extras on trucks and vehicles, delivery charges and other costs related to the acquisition may be included in the loan amount.
- Keep the loan amount constant and vary the loan term. Note how this changes the repayment result. The shorter the loan term the higher the repayments but the less interest payable on the loan. The longer the term, the lower the repayments. More interest in total will be payable but you may have more realistic and workable repayments.
- Do the same process with the balloon amount. Larger balloon, smaller repayments. Smaller balloon, larger repayments.
By varying the values entered you are effectively structuring your own finance deal. This is valuable information that you can use in preparing budgets – have variations to share with colleagues or for your own deliberations.
Most importantly, the calculators allow you to prepare to brief your lender on your requirements. Being prepared in advance may expedite the entire finance process and contribute to you taking delivery of your goods quicker or having that much-needed funds available faster.
When using any loan calculator, always read the terms and conditions and disclaimer so you are fully aware of the significance of the results you are generating. Using a calculator is not an application for any form of finance. You will need to contact us for a specific quote.
To discuss your lending requirements contact 1300 000 033 today
DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS.