Business Loan Calculator – A Simple tool for SMBs
Unless you live off the grid, you know that old school is no longer in. Advances in technology help people complete tasks quicker. Nowadays everyone has a cell phone, hardly anyone writes a check anymore, and who knew there were so many ways to save memory space on your gadgets.
But even if you’re a tech-savvy entrepreneur, there’s one tool that maybe you hadn’t heard of before: a business loan calculator, like the one Camino Financial provides for any business owners.
If you’re in the market for a small business loan, this handy technological tool provides a summary of costs before you ever contact a lender. It puts you in control of your finances so there aren’t any nasty surprises.
Business owners usually know there are practical reasons to get a business loan, however, they may not know how much a loan will cost them.
How a Business Loan Calculator Answers Your Questions
According to Forbes Magazine, the future looks bright for small business owners as approval rates for loans have continued to increase since 2017.
That’s encouraging for sure, but Small Business Trends sheds more light on the matter: insufficient capital is the number 2 reason why businesses fail, that’s because they are unable to manage cash flow.
Many business owners should have gotten loans because they didn’t have enough money to keep growing (or to keep surviving). On the other hand, some entrepreneurs take out bigger loans than they can repay.
Therefore, it’s a smart move to crunch numbers in advance.
With a business loan calculator, you can enter the desired loan amount, interest rate, and a loan repayment term between 24-60 months. Within seconds the calculator provides a summary of total costs you will pay including interest, closing fees, and the monthly payment.
That’s all there is to it.
You can even reset the online gadget to create different scenarios to compute affordable payment terms.
This Small Business Owner Put the Tool to Work
Having run a successful ice cream shop for nearly a decade, Samuel had always relied on word of mouth as his primary way to advertise. People love telling others about his delicious gelato, sorbet, frozen yogurt and other yummy desserts.
Some months ago he’s learned how social media marketing could impact his business positively. He needed to hire a social media specialist to expand his business exposure in order to boost sales. Yet, he knew that doing so would cost him the money he didn’t have.
A fellow entrepreneur suggested that he got a loan and showed him how to use the online business loan calculator. He told Samuel to make sure monthly payments don’t exceed 80% of his monthly net profit and the total cost of the loan doesn’t exceed the total return expected after the investment.
Samuel settled on a loan for $25,000 payable in 48 months at a 1.75% interest rate. He would pay $12,159 in interest, a closing fee of $1,748, and his monthly payment would be $774.
Since his projected monthly net profit was $1,200, the monthly payment didn’t exceed 80% of the profit. Likewise, his return after the investment exceeded the cost of the loan by roughly $8,000.
He applied with an online lender, got the funding, and hired the specialist to get started on an advertising campaign on social media. Long story short, in a few months Samuel increased his sales by 15%.
Your Go-To Gadget When Needing a Loan
The simple-to-use business loan calculator allayed any fears Samuel had about whether to get a loan. He moved forward confidently because the loan wouldn’t wreck his budget or his life. He has realized of the many social media techniques that can help any business; now he’s frankly a bit disappointed that he didn’t try them before.
Technology is here to stay so why not take advantage of its pers? Use the business loan calculator to find out your loan costs ahead of time!