Loan Repayment Calculator

This loan repayment calculator works out the regular payment (Pmt) needed to repay a loan (PV) in n periods using a periodic interest rate i. The repayment is assumed to be made at the end of each period.

Last modified July 16th, 2019 by Michael Brown
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Loan Amortization Schedule Calculator

This free loan calculator with amortization schedule can be used for any loan up to a maximum term of 3,650 payment periods.

The calculator will produce a loan amortization schedule and calculate the periodic repayments due on the loan together with the total amount repayable and total interest payable over the term.

Last modified July 16th, 2019 by Michael Brown
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Maximum Business Loan Calculator

This maximum business loan calculator can be used when preparing financial projections for a business plan to estimate the maximum amount a lender is willing to lend based on three lending criteria, collateral available, the capacity of the business to make repayments, and the net worth of the business.

Last modified July 16th, 2019 by Michael Brown
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Five C’s of Credit

The 5 C’s of credit is one technique used by financial institutions to assess the credit worthiness and risks associated with lending to a business seeking debt finance. An understanding of the five C’s of credit combined with financial projections, will allow a business to be better prepared when approaching lenders for debt funding.

Last modified August 14th, 2019 by Michael Brown
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Times Interest Earned

The times interest earned ratio is a measure of the ability of a business to make interest payments on its debt, as such it is a measure of the credit worthiness of the business. Providers of debt finance use the ratio to check financial projections.

Last modified July 16th, 2019 by Michael Brown
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Financial Leverage

A business with a high level of financial leverage (sometimes referred to as being highly geared) is considered to be more risky as finance costs need to be paid before equity owners get their return. However, in return for this higher risk a high level of financial leverage will give greater returns to the owners provided cash and profit are managed correctly.

Last modified July 16th, 2019 by Michael Brown
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Startup Funding Requirements

The shape of the cumulative cash flow graph is referred to as the j curve or death valley curve, as it identifies the level of funding a business needs to have available to survive the startup years.

Last modified July 19th, 2019 by Michael Brown
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Enter New Debt Payment Term

Debt finance is normally evidenced by a note or document which specifies the amount, interest rate, and date of repayment. The date of repayment will dictate the payment term for the debt, for example a debt might be payable in five years time.

In the previous step the new debt was entered, and in order to allow for this debt to be repaid, a new debt payment term needs to be entered.

Last modified July 16th, 2019 by Michael Brown
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Estimate New Debt

For a business, debt can take many forms including loans, mortgages, borrowings, overdrafts, credit cards, and generally any form of finance on which interest is paid.

New debt is included in the cash flow statement of the projection as a positive figure as it represents cash flowing into the business from lenders. For example, if in year two the plan is to borrow 46,000 to finance the purchase of new equipment, the figure of 46,000 should be included in the cash flow statement on the new debt line.

Last modified July 16th, 2019 by Michael Brown
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Enter Opening Debt Payment Term

Debt finance is normally evidenced by a note or document which specifies the amount, interest rate, and date of repayment. The date of repayment will dictate the payment term for the debt, for example a debt might be payable in five years time.

In the previous step the opening balance sheet debt was entered, and in order to allow for this debt to be repaid, an opening debt payment term needs to be entered.

Last modified July 16th, 2019 by Michael Brown
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Enter Debt Opening Balance

The opening day debt balance forms part of the opening balance sheet of the business. Debts are amounts which are owed by the business to providers of debt finance sometimes referred to as lenders.

Debts include many types of finance including loan, borrowings, mortgages, credit cards and generally any form of finance which involves the payment of interest.

Last modified July 16th, 2019 by Michael Brown
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How to Calculate Startup Debt Finance

Startup costs need to be funded through a combination of capital injected by the owners and investors, supplier credit and debt finance. This can be seen from our start up costs calculator which shows startup expenses and assets on the left hand side matched by the startup funding on the right hand side.

It is unlikely in a startup business that suppliers will grant substantial credit terms before the business has started trading, so having estimated the amount of startup capital available, it is possible to calculate the balance that will need to be funded by debt finance, such as startup business loans.

Last modified July 16th, 2019 by Michael Brown
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