Business expansion begins with a nagging feeling that it’s time to apply for a small business loan. Your business’s financial profile keeps looking better and better and income has exceeded expenses for several months. Rather than staying in a holding pattern, it seems like a better idea to blow the dust off your business plan and tackle some projects.

When researching online loans, you’ll find that repayment terms average between 24-60 months with annual interest rates evening out at 12 to less than 30 percent. The convenience of applying online appeals to a borrower’s sense of privacy and not having to trudge through whether to apply for a loan at a local bank. Plus, you don’t need to provide collateral such as a vehicle or equipment in order for lenders to approve the loan.

To ease your mind even further, you can use a business loan calculator like the one Camino Financial provides for its clients. In preparation to use the calculator, add up your total monthly personal and business net income after you’ve subtracted any payments for debt. As a rule of thumb, you can afford a loan for about 80 percent of that net figure. A user-friendly online loan calculator is simple to use and displays all costs associated with small business loans.

How to Use a Business Loan Calculator

As borrowers avail themselves to online technology, they can tabulate results after using the calculator and feel more prepared before completing an application. This online tool requires a few simple answers so the software can make computations. Here’s a helpful outline on the best way to use the tool.

  1. Loan Amount: Enter a dollar amount in the blank provided that’s labeled “loan amount.” Take as much time as you want to experiment with lower and higher loan amounts to see the different costs associated with each calculation.
  2. Payment Terms: Click on the available drop-down menu and select your desired payment term. Again, play around with different scenarios to achieve the best fit for your budget.
  3. Monthly Interest Rate: The calculator also needs your desired monthly interest rate and includes a list ranging from, for example, 1% to 2.25%. Simply click on one of the percentages listed.
  4. Click on calculate: Within seconds the loan information and costs appear.
  5. Review the Information: In addition to the information you imputed, you’ll see these costs: the closing fee, total interest paid over the life of the loan, your monthly payment amount, and the total cost of the loan. Please note that a documentation fee is not normally charged when using a paperless online application. Your bank usually charges a funding fee to deposit the funds into your designated business account.
  6. Keep Using the Tool: After each calculation, make sure to “reset calculator” to clear the tool. Let the tool help you determine the exact amount that suits your monthly budget in relation to other operating expenses. Re-enter different loan amounts, payment terms, and interest rates. The tool is at your disposal to make as many calculations as you want.

That’s all there is to using the small business loan calculator. The tool simplifies financial planning and performs all the number crunching so there are no surprises, whatsoever.

Arming yourself with valuable information acquired through an online loan calculator helps prepare you for the process of applying for a small business loan. You’ll have a close estimate of your monthly payment before you ever go forward with the loan.

You can be assured that the loan specialists at Camino Financial endeavor to match the loan to your specific business needs. By working with a financial specialist, you can choose your repayment terms and secure funding quicker, typically within a few days rather than weeks.

This post was written by Betsy Wise. Betsy also writes for Camino Financial, an online lender for small business loans. Within a 30-year period, Betsy worked as a Deputy Clerk for a school board and as Accounting Manager for the boat, construction, and legal industries.

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