Why plain dollars beat a headline rate
A rate on its own hides as much as it reveals. It does not show fees taken out of the loan before you get it, it reads differently depending on whether it is charged on the full balance or the reducing balance, and some business products are not quoted with an annual rate at all. Dollars do not have those problems. If you know how much you borrow, how much you pay back and what fees sit on top, you know what the loan costs.
This calculator takes those figures from a single written offer and shows the total cost of finance, the cash that actually reaches your account, the cost per dollar received, the average cost per day over the term and the approximate size of each repayment. You can run each quote you receive through it, or put several side by side in the offer comparison calculator.
Using the result to decide
The useful question is not whether a loan is cheap, but whether it is worth it. If finance lets you take a supplier discount, fulfil a profitable order or keep a team working through a slow month, compare the cost per day with what that opportunity earns. Where the opportunity clearly earns more than the finance costs, borrowing can make sense. Where it does not, no structure will make the numbers work.
Also check the size of each repayment against your cash flow. Daily and weekly debits are common with short-term lending and can be harder to carry than one monthly payment even when the total is similar. Our repayment coverage calculator helps with that check.
Getting the figures right
- Use the written offer or contract, not a quote over the phone.
- Include every fee: establishment, documentation, valuation or settlement, monthly account and any early repayment charges you expect to pay.
- If a fee is added to the loan balance, it is already inside the total repayable, so leave it out of the fee boxes.
Not sure your offer is competitive for a business like yours? You can make one enquiry and have a lending partner look at it. There is no credit check to enquire and your details are not shared with a crowd of lenders. Accurate answers on the form help them give you a straight comparison, and you are free to ask questions first before deciding anything.
Frequently asked questions
What counts as the cost of a business loan?
Everything you pay beyond the amount you borrowed: interest or the lender's margin, establishment and documentation fees, monthly account fees, broker or referral fees you pay, and any other charge in the contract. Add them all together to see the real cost.
Why show cost per day?
Short-term business loans are often used for weeks or months rather than years, so cost per day helps you judge whether the finance is worth it for the job. If a loan costs a certain amount per day and the opportunity it funds earns more than that, the numbers may stack up.
My offer only shows a repayment amount. What do I enter?
Multiply the repayment by the number of repayments to get the total repayable, then enter any fees deducted up front and any ongoing fees not already included in the repayment. Ask the lender to confirm the total in writing.
Is this the same as a comparison rate?
No. A comparison rate is a regulated annualised figure used mainly for consumer lending. This calculator shows plain dollar costs, which work for any business offer however it is quoted.
We are an information site, so we do not rank lenders, publish interest rates or accept payment to feature a product. Every page is written and checked by our editorial team against official sources. Read our editorial policy and how we are funded.
