Business Loan EMI Calculator

Using the business loan EMI calculator

Fill in the sanctioned amount, the yearly rate and the tenure. Add the processing fee percentage; the calculator shows it in rupees with 18% GST. Businesses registered for GST may be able to claim input credit on that GST; check with your accountant.

Each row below the result splits a year's repayments into principal and interest. Interest on a business loan is generally a deductible business expense, while principal is not, so the yearly interest column is the figure your accountant will want.

EMI for common business loan sizes

Large loans, such as ₹1 crore or more, are usually secured by property or plant and priced lower. For a 10 crore business loan EMI, the same calculator works; the inputs just scale up.

Can your cash flow carry the EMI

Lenders look at a debt service coverage ratio: the cash your business earns before interest and depreciation, divided by all loan repayments due. Many want this above about 1.25 to 1.5, meaning you earn at least a quarter to a half more than the EMIs. To check:

1. Take your average monthly profit before interest and depreciation over the last 12 months.
2. Divide it by the total of all EMIs, including this new one.
3. If the answer is near 1, a slow month will hurt. Consider a smaller loan, a longer tenure or a working capital limit instead.

Types of business finance

• Term loan: a fixed amount repaid by EMI, for equipment, renovation or expansion. This calculator fits it directly.
• Working capital or cash credit: a limit you draw and repay as needed, with interest only on what is used. See the OD interest calculator.
• Government backed micro loans: the Mudra loan EMI calculator covers loans under that scheme.
• Loan against property: for larger sums at lower rates, using property as security. See the LAP EMI calculator.
• Vehicle and machinery loans: secured by the asset; trucks and vans have their own commercial vehicle EMI page.

Charges and terms to read carefully

• Processing fee and documentation charges, plus GST.
• Foreclosure charges: RBI's ban on prepayment penalties covers individual non business loans, so business loans often carry a charge, commonly 2% to 5% of the outstanding amount.
• Rate type: some business loans from NBFCs and fintech lenders are quoted at a flat rate; the flat vs reducing tool shows its true cost.
• Personal guarantee: a proprietor or partners usually guarantee the loan personally.
• Repayment by daily or weekly debit, which some lenders use; it changes the effective rate.

Before you apply

Lenders typically ask for business vintage of 2 to 3 years, GST returns, income tax returns, bank statements and a credit report for the business and its owners. A clean record of paying suppliers and existing loans on time helps more than anything else. Compare at least two offers on total amount payable plus fees, not on the headline rate. Every other loan type is collected on the EMI calculator hub page.