Business loan repayment comparison

A low APR on a term loan can look cheaper than a revolving facility quoted monthly — until you model how much you actually draw, or compare against a merchant cash advance factor rate that does not behave like traditional interest. UK business owners need the total pounds paid over the life of the facility, especially when products use different pricing mechanics.

This calculator puts term loan, RCF and MCA on the same footing: monthly cost profile, total repaid, total cost of credit and an effective annual cost percentage so you can rank routes for your scenario.

Term loan uses standard amortisation on the full amount at your APR over the selected term. RCF applies your monthly rate to the drawn balance — modelled at steady utilisation over the term, which is an approximation of real draw/repay patterns. MCA applies a factor rate to the advance and spreads total repayment evenly over twelve months for comparison; actual MCA deductions track card turnover daily.

The verdict highlights the cheapest route by total cost of credit for your inputs. Edit APR, monthly RCF rate, utilisation and factor to mirror quotes you have received.

Match the product to how you will use the money. One-off equipment, acquisition or stock purchases often fit a term loan. Fluctuating working capital — payroll spikes, seasonal stock, project gaps — may suit an RCF you draw down selectively. MCAs can suit businesses with strong card turnover needing fast access, but compare the total cost carefully against traditional options.

If you have not yet sized the amount, start with the borrowing capacity calculator. For HMRC liabilities specifically, use the VAT and tax bill spreader to compare spreading versus a lump sum outflow.