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Is a business loan an investment or a debt? Learn with this calculator


Located on the banks of the River Mersey, Warrenton England may be where you want to start a successful business. Other towns like Liverpool or Manchester draw crowds to canals, formal gardens, and parklands.

You may have the perfect spot picked out but businesses require an investment of cash which most small business owners don’t have.

A business loan can be the best way to start, grow, and expand your business. Most entrepreneurs don’t know whether they can afford a loan unless they use a technological tool such as a business loan calculator. The financial gadget helps you decide whether to get a loan because it automatically calculates the costs you’ll pay.

Here’s how a British couple used one and decided to buy an established Warrenton restaurant.

A  Business Loan Calculator Provided Quick Answers

Restaurant available for lease: Located near offices, shops, and public eateries. The large dining room seats 80 whilst lounge seating accommodates about 10 customers.

When William and Sarah say the ad, they became higly interested in leasing the property because it was located on a busy main street. Furthermore, it had a prep area, well-appointed kitchen, storeroom, and a second-story storage area.

When they opened their business, they couldn’t be happier. Owning a restaurant had been their dream for so long.

The restaurant averaged £4,000 per week in sales and opens for dinner only. This schedule freed up time for William and Sarah to plan, run errands, and attend family events.

The couple didn’t know whether they were in a financial position to pay the leasehold price, rent, and overhead costs.

They met with their accountant who advised them to use a business loan calculator. “All that’s required to use the tool is to enter a loan amount, select a payment term, and monthly interest,” he said.

The business loan calculator summarized the total cost of the loan to include the closing fee and total interest paid. William and Sarah were able to reset the calculator to calculate the most affordable scenario that fits within their budget.

There are two other conditions they should meet. The monthly payments shouldn’t exceed 80% of their monthly net profit and the total cost of the loan must not exceed the investment’s total return.

After using the financial tool, they decided to get a £32,000 loan. There was enough revenue to adequately cover the £1,082 monthly payment which didn’t exceed 80% of their projected monthly net profit. Likewise, total costs didn’t exceed the investment’s total return.

William and Sarah looked at each other in amazement. How could financial planning be so easy?

They borrowed enough money to beef up the building’s security system and to upgrade the restaurant’s point-of-sale system. Once the business had been operating for several months, they started offering a lunch menu to generate more sales.

Without using the business loan calculator, they probably wouldn’t have gotten the loan that allowed them to fulfill their dreams.

Use a Business Loan Calculator To Make An Informed Decision

Just like William and Sarah, you probably don’t want to approach a lender unless you know beforehand that you can make loan payments. In their situation, getting a loan made sense. They saw within minutes that a loan was a good investment and a smart move. They could view real costs to make a sound financial choice.

Are you uncertain about starting or growing a business?

There’s one way to find out.

Use the business loan calculator to obtain answers quickly. You’ll know at a glance what you should do next.

Are you ready to see if a business loan is an investment or a debt? You may be amazed at how easy it is to find out.



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