Money Matters

Business loan calculator (with amortisation schedule)

Our easy-to-use business loan calculator calculates repayments and total loan costs in minutes. Explore the complete guide to understand your funding options.

Sep 23, 202516 min read Share

How much will a business loan really cost your company, once interest rates and fees are considered?

Can your business’s monthly income realistically support the repayment terms?

When applying for a business loan in South Africa, it’s essential to understand the total cost and carefully review the repayment schedule to make sure the funding aligns with your cash flow and long-term goals.

This guide outlines the key facts about business loans, from the most common types to alternative funding options and typical interest and fee structures.

You will also analyse how a business loan calculator works, helping you crunch the numbers, compare offers, and choose the loan that best fits your business needs.

What this guide covers:

Business loan calculator

Banks and lenders each have their own methods for calculating interest.

This business loan calculator helps you evaluate financing options or identify the ideal loan terms for your business.

Here are a few ways to use the tool:

• Calculate your monthly repayment based on the loan amount, interest rate, fees, and term. Then, factor this into your budget to see how it impacts cash flow.
• Calculate the total repayment amount over the term of the loan, including interest. This gives you a clearer picture of the true cost of borrowing.
• Compare the full cost (principal + interest + fees) of different funding options to choose the smartest one for your business.

How to use the business loan calculator

To use this free business loan calculator, input the following information:

• Interest rate: the rate charged by the lender for the loan.
• Compound frequency: how often interest is calculated and added to your balance.
• Loan term: the number of years you must repay the loan.
• Payment frequency: how often you need to make repayments.
• Initiation fee: a processing fee that can be paid up front or capitalised into the loan amount and therefore affect amortisation.
• Other fees: these might include late fees or prepayment charges. (See the section on loan fees below.)

The calculator displays your regular payment, total repayment amount, total interest, total interest and fees, overall loan cost, and an amortisation schedule.

What is amortisation?

Amortisation is an accounting term with two common meanings.

The amortisation of assets refers to spreading out the cost of intangible assets—like software or patents—over their expected useful life.

This method reflects how the asset’s value decreases over time as it’s used.

Both amortisation and depreciation appear on an income statement and are reflected on the balance sheet.

The amortisation of loans (which applies here) refers to gradually paying off a loan through regular repayments over a set period.

Simply, it means reducing debt bit by bit with each payment.

An amortisation schedule shows how your loan balance decreases over time, breaking each repayment into principal and interest.

A business loan calculator with an amortisation schedule makes it easy to see how each payment affects the remaining balance, helping you track progress across the full loan term.

Types of business loans

Depending on your needs and business profile, you may qualify for different types of funding:

Term loan

A term loan is one of the most common financing options for businesses of any size.

The lender delivers the loan amount as a lump sum.

Then, you pay off the loan with interest over a set period.

Term loans are ideal for businesses needing fixed payments to maintain steady cash flow during repayment.

They are available from banks like FNB and Standard Bank and online lenders like Bridgement.

And since term loans tend to have comparatively low interest rates, this loan type is one of the most widely affordable options.

However, getting approval for a term loan may require collateral or a personal guarantee.

And qualifying for the lowest interest rates often requires a strong credit profile and multiple years in business.

Equipment financing

Equipment financing is a business loan used to purchase assets such as manufacturing machinery, commercial vehicles, or agricultural equipment.

The equipment itself typically serves as collateral.

Most lenders offer both equipment loans and equipment leases:

Loans require repayment of the capital amount (principal) plus interest.

Leases allow you to use the equipment for a fixed term, after which it’s returned to the lender.

This type of financing can be a good option for acquiring new equipment, but it isn’t suitable for general business purchases.

A deposit may be required for high-value equipment.

Invoice factoring

Invoice factoring involves selling unpaid invoices to a lender, who then takes responsibility for collecting the payment.

You receive a lump sum, usually between 70% and 90% of the invoice value, upfront.

Once the customer settles the invoice, the lender pays you the remaining balance, minus their fee.

Because invoice factoring doesn’t involve a credit check, it won’t affect your credit record.

It also gives faster access to working capital than many traditional loans, which can help stabilise cash flow.

However, it can be costly.

Lenders typically apply a factor rate to the invoice amount, meaning the longer your customers take to pay, the more expensive the loan becomes.

Invoice financing

Invoice financing also uses outstanding invoices as leverage, but instead of buying them, lenders use them as security for a loan.

You receive an advance of up to 90% of the invoice value.

Your customers pay you directly, and you repay the lender, plus fees and interest.

Like factoring, this is a fast way to bridge cash flow gaps. However, it can be expensive, as lenders often charge both interest and credit management fees.

The creditworthiness of your customers plays a key role in determining loan terms and costs.

Credit card

A business credit card gives access to a revolving line of credit—you can spend up to a set limit, repay the balance, and reuse the funds.

You only pay interest on the amount you use.

Business credit cards are convenient for day-to-day expenses like equipment, fuel, or stock purchases. Some cards offer rewards or cashback on certain transactions.

If you repay the full balance each month, a credit card can be a relatively affordable finance option. If not, interest charges add up quickly, making it far more expensive.

Also note that the annual percentage rate (annual interest rate) may increase over time, depending on your credit risk.

Revolving credit

Revolving credit allows your business to draw from a pool of funds up to a pre-agreed limit.

Like a credit card, it offers flexibility—you borrow, repay, and reuse as needed.

You only pay interest on what you borrow, not the total facility.

Revolving credit are offered by banks, fintech lenders, and online platforms in South Africa.

Since they’re often unsecured (no collateral needed), they’re easier to qualify for than traditional loans.

However, they may come with additional costs such as monthly service fees, drawdown charges, or early repayment penalties.

Merchant cash advances

A merchant cash advance gives you quick access to capital based on your business’s projected card sales.

You borrow a lump sum and repay it from a percentage of your future debit or credit card transactions.

This option doesn’t require collateral and can be helpful during a cash flow crunch.

However, it’s also one of the most expensive forms of funding. Lenders charge a factor rate—a flat upfront fee—plus origination and repayment processing fees.

This type of finance should be used cautiously, especially if cash flow is already tight.

Commercial real estate loan

A commercial real estate loan is a term loan specifically for buying or leasing business premises.

You can use it to acquire property or renovate existing space and repay the loan, plus interest, over a fixed term.

These loans often come with lower interest rates and longer repayment periods, like a home loan or bond.

However, the application process can be lengthy.

Lenders typically require a comprehensive application, financial reporting, and a property valuation or inspection, so this isn’t a quick-access option.

Microloan

Microloans are like term loans, giving you access to a lump sum you repay with interest. But as the name suggests, microloans are for smaller amounts—generally up to R250,000.

These loans are ideal for startups and small businesses seeking working capital. In South Africa, institutions like the Small Enterprise Finance Agency (SEFA) and various online lenders offer microloans.

While they provide accessible funding, microloans often come with higher interest rates and shorter repayment terms than traditional loans.

Bridging finance

Bridging loans are short-term funding solutions designed to help businesses cover immediate cash flow gaps—often between issuing invoices and receiving payment, or while waiting for a larger loan or deal to be finalised.

They’re commonly used in construction, real estate, and government contracting industries.

Seasonal working capital loans

These loans are tailored for businesses with seasonal demand, such as those in tourism, agriculture, or events.

They typically offer short repayment terms and quick access to capital when it’s needed most.

Unsecured digital loans

Unsecured digital loans are fast, paperless finance options provided by fintech lenders.

With minimal documentation, they’re ideal for SMEs with substantial turnover but limited assets to offer as collateral.

Revenue-based financing

This model allows businesses, particularly in sectors like retail or hospitality, to repay funding as a percentage of daily or monthly turnover.

It’s a flexible option for companies with variable income, as repayments scale according to sales.

Government-backed small business loans

In South Africa, several government initiatives aim to make funding more accessible for small businesses, especially those underserved by traditional lenders.

These programmes are offered through institutions like Small Enterprise Finance Agency (SEFA), the Industrial Development Corporation (IDC), and Small Enterprise Development Agency (SEDA).

The types of support offered include both financial and non-financial support.

Blended finance and loan guarantee schemes

Government agencies such as the SEFA and the IDC offer blended finance options—combining loans and grants—to help small businesses grow.

These programmes are designed to lower the lenders’ risk and improve entrepreneurs’ access to funding.

Fixed asset financing

Funding for commercial property, machinery, and land is available through initiatives like SEFA’s asset finance and the IDC’s industrial finance programme.

These loans typically offer longer repayment periods and lower interest rates, making them well-suited for capital-intensive investments.

Startup and microenterprise support

SEFA also provides startup capital and microloans—often up to R250,000—for early-stage businesses.

These are aimed particularly at youth-owned, women-owned, and township-based enterprises needing working capital or funds for equipment purchases.

A business must be formally registered, operate for profit, and meet the agency’s eligibility criteria to qualify.

Specific sectors may be excluded due to regulatory or risk considerations.

How to apply

Government agencies don’t lend directly to businesses.

Applications are made via participating financial institutions or directly through SEFA or the SEDA.

These organisations also provide valuable business support, such as mentoring, training, and assistance with business plans.

Funding options can be explored through SEDA’s online portal or at a local SEDA branch.

Once a suitable loan is identified, a small business loan calculator can help compare repayment terms and estimate monthly instalments.

Are there other sources of funding for a business?

If traditional loans aren’t the right fit, several alternative funding options are available to businesses in South Africa.

These include overdrafts, personal loans, venture capital, crowdfunding, and peer-to-peer (P2P) lending.

Overdraft

An overdraft allows your business to continue transacting even when the bank account balance drops below zero.

Some banks offer overdraft protection, covering shortfalls automatically.

You repay the overdrawn amount along with interest and fees.

Like a line of credit, an overdraft provides quick access to working capital and often has lower interest rates than credit cards or other short-term loans.

Personal loan

A personal loan can fund a business, especially in the early stages when the company has no credit history.

Since it’s taken out in your name, it doesn’t require business credit, but it typically offers smaller loan amounts and carries risk to your credit profile if repayments are missed.

Venture capital

Venture capital (VC) and angel investment can provide significant funding, particularly for businesses in high-growth sectors like fintech, health-tech, and green energy.

In South Africa, prominent VC networks include Knife Capital, 4Di Capital, and Savannah Fund.

While VC funding can accelerate growth, it often involves a lengthy, competitive application process.

It also usually requires giving up a portion of ownership and, in some cases, some control over strategic decisions.

Crowdfunding

Crowdfunding enables businesses to raise money from a large pool of individual backers, often through online platforms.

Instead of repaying contributors with interest, businesses typically offer products, services, or other rewards.

This approach can work well for startups looking to generate buzz, especially with a strong social media campaign.

Most platforms charge a fee based on the total amount raised. Popular crowdfunding platforms in South Africa include Thundafund, Uprise.Africa, and BackaBuddy.

Peer-to-peer (P2P) lending

P2P lending connects businesses directly with individual or institutional investors through digital platforms.

In South Africa, platforms such as RainFin and Lula (formerly Lulalend) offer fast, unsecured loans to SMEs.

These platforms often use alternative credit scoring methods, making them more accessible to businesses that may not qualify for bank loans.

Interest rates vary based on perceived risk, but the application process is typically faster and more flexible than traditional lenders.

What business loan fees will I have to pay?

Each type of business loan comes with its own set of fees.

Factoring these into your calculations is essential to understanding the true cost of borrowing.

Use the commercial business loan calculator above to estimate total costs accurately.

Term loans

Term loans from South African banks and alternative lenders usually include an initiation fee, which covers the cost of processing your application.

This fee is typically deducted from the loan amount before the funds are disbursed.

• Banks: initiation fees generally range from R1,000 to R5,000
• Alternative lenders: may charge slightly higher fees, especially for unsecured loans

Microloans

Microloans—offered by institutions such as SEFA or alternative lenders—often include the following fees, which are usually built into the repayment schedule:

• Initiation fee
• Monthly service fees
• Credit life insurance, which is sometimes mandatory

Commercial real estate loans

Loans for purchasing or upgrading business premises may involve:

• Initiation fees (0.5% to 1%)
• Property valuation and legal fees
• Bond registration costs
• Deeds Office charges

These costs can vary depending on the property’s value and location.

Revolving credit

Business overdrafts and revolving credit facilities often include:

• Facility initiation fees
• Monthly service or maintenance fees
• Drawdown fees (charged when accessing funds)
• Early settlement penalties in some cases

Interest is only charged on the amount drawn, not the total credit facility.

Business credit cards

Credit cards issued by banks like Absa, FNB, or Nedbank may include:

• Annual card fees (typically R300 to R1,200)
• Late payment penalties
• Cash advance fees
• Foreign transaction fees

Equipment financing

Asset finance agreements commonly include:

• Initiation fees
• Monthly administration fees
• Early settlement penalties (if paid off before the end of term)

In some cases, insurance on the financed equipment is also required.

Invoice financing

Providers of invoice financing typically charge:

• A credit management fee
• An initiation fee
• Interest on the advanced amount until the invoice is settled

Invoice factoring

With invoice factoring, the lender charges a factor fee, usually between 1% and 3% of the invoice value. This fee may increase the longer it takes your customer to pay.

Merchant cash advances

Merchant cash advances are priced using a factor rate (usually between 1.1% and 1.5%) to calculate the total repayment amount. Additional fees may include:

• A flat initiation fee
• Daily or weekly repayment processing fees

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Note:

For agreements that fall within the National credit act (NCA), fees may not exceed the prescribed amount relative to the principal debt as per the NCA.

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What are the typical terms for a business loan?

Business loan repayment terms vary by loan type, ranging from a few months to several decades, with some flexibility depending on the lender and agreement.

Loan type	Typical repayment terms
Term loan	From 12 to 60 months (1 to 5 years), with some banks offering up to 10 years for larger loans.
Microloan	From 6 to 36 months, depending on the lender (e.g. SEFA or alternative lenders)
Commercial real estate loan	Up to 20-24 years, like a mortgage, depending on the property and lender.
Revolving credit / overdraft	Typically, 6 to 24 months, with flexible draw and repayment options.
Business credit cards	Revolving credit with a 28 to 31-day billing cycle; minimum payments due within 15-25 days after statement issue.
Equipment financing	From 12 to 60 months, depending on the asset’s lifespan and value.
Invoice financing	From 30 to 90 days, aligned with invoice payment terms.
Invoice factoring	From 30 to 90 days, with fees increasing the longer the invoice remains unpaid.
Merchant cash advance	From 3 to 12 months, with repayments linked to daily or weekly turnover.

Sources were cross-referenced between Fundrate, SME South Africa, Lamna, and published loan term data from FNB, Nedbank, and Bridgement.

What business loan interest rate should I expect to pay?

Business loan interest rates vary based on factors like loan type, business age, credit history, and market conditions.

As a guide, average business loan rates are:

Loan type	Typical interest rate range
Term loan	Around 13% to 24%, depending on your credit profile and whether the loan is secured.
Microloan	Up to 28.5% for unsecured loans, often offered by SEFA and alternative lenders.
Commercial real estate loan	From 10.5% to 19.5%, usually lower for secured loans backed by property.
Revolving credit / overdraft	Typically 15% to 21.5%, based on turnover and creditworthiness.
Business credit card	Around 18% to 21.5%, with rates influenced by usage and repayment history.
Equipment financing	Between 13% and 20%, depending on the asset type and your business risk profile.
Invoice financing	Monthly rates of 2% to 5%, with the balance paid after customer settlement.
Invoice factoring	Fees vary, but typically 2% to 4% per month depending on the structure.
Merchant cash advance	Usually 20% to 35%, calculated as a percentage of your average monthly card sales.

Sources were cross-referenced from Fundrate, SME South Africa, Ventureburn, and lender disclosures from Lula, Bridgement, and Merchant Capital.

How much do business loans offer?

The amount you can borrow depends on the type of financing you choose.

In some cases, the type of lender can also affect the total loan amount.

Here’s a breakdown of the amounts you may be eligible to borrow:

Loan type	Typical loan amount
Term loan	Up to R5 million, with most loans ranging from R250,000 to R2 million.
Microloan	Up to R250,000, offered by SEFA and alternative lenders.
Commercial real estate loan	From R500,000 to R20 million, depending on the property and lender.
Revolving credit / overdraft	Up to R1 million, depending on turnover and credit profile.
Equipment financing	Covers 80-100% of the equipment’s value
Invoice financing / factoring	70-90% of the invoice value
Merchant cash advance	Typically, 50-250% of your average monthly card sales.

Sources were cross-referenced from Fundrate, SME South Africa, Ventureburn, and lender disclosures from Lula, Bridgement, and Merchant Capital.

Can I fund my business with my own money as a loan?

Yes, you can loan your own money to your business in South Africa—whether it’s a (Pty) Ltd, a sole proprietorship, or another registered entity.

This is a common practice, especially for startups that may not yet qualify for external funding.

Unlike traditional financing, a personal loan to your business doesn’t require a credit check, collateral, or lender fees.

You also have the flexibility to set your own interest rate and repayment terms.

However, to make sure the loan is treated correctly—both legally and for tax purposes—you should:

• Draft a formal loan agreement that includes the loan amount, interest rate (if any), repayment schedule, and consequences of default.
• Record the transaction in your business’s financial statements as a liability (loan payable to the owner).
• Repay the loan according to the agreed terms to avoid it being reclassified as an equity contribution.

If the loan isn’t documented or repaid, SARS (South African Revenue Service) may treat it as a capital contribution, which increases your equity in the business but removes the option to claim interest as a business expense.

It’s also important to understand the risk: if your business is unable to repay the loan, your personal finances could be negatively affected.

This is especially relevant if you’ve used personal savings or taken out a personal loan to fund the business.

For added protection and clarity, many business owners consult with an accountant or tax advisor when structuring owner-financed loans.

Final thoughts

Exploring the right funding options is key to making smart financial decisions for your business.

Use our business loan calculator to estimate repayments, compare offers, and choose the financing solution that aligns with your goals and cash flow.

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