Business Loan Calculator
Calculate monthly repayments and the true cost of business financing in Nigeria — including BOI, commercial bank, and microfinance loans.
Business Loan Details
₦
%
mo
Monthly Repayment
₦198,799
Total Repayment
₦7,156,769
Total Interest
₦2,156,769
Interest as % of Principal
43.1%
Loan Term
36 months
How to Use This Calculator
Enter your loan amount, the annual interest rate your bank or lender is offering, and the loan term in months. The calculator instantly shows your monthly repayment, total amount repaid, and total interest cost — helping you understand the true cost of business financing before committing.
The Formula
Monthly Payment = P × [r × (1+r)^n] / [(1+r)^n − 1]
Where:
P = Loan principal
r = Monthly rate = Annual rate ÷ 12 ÷ 100
n = Total months
Total Repayment = Monthly Payment × n
Total Interest = Total Repayment − Principal
Example
SME Working Capital Loan — ₦5M at 25% for 3 Years
Loan Amount₦5,000,000
Annual Rate25%
Term36 months
Monthly Repayment≈ ₦198,000
Total Repayment≈ ₦7,128,000
Total Interest≈ ₦2,128,000 (42.6%)
At 25% p.a., a ₦5M loan costs over ₦2.1M in interest over 3 years. Reducing the term to 24 months cuts interest to ≈₦1.37M but raises monthly payments to ≈₦274,000. Consider whether your business cash flow can support the higher payment.
Nigerian Business Lending Options
- Commercial banks (Access, GTB, Zenith, First Bank): 22–30% p.a. — Best rates but require audited accounts, collateral, and often a minimum 2-year trading history.
- Development Finance (BOI, DBN, NEXIM): 9–15% p.a. — Government-backed, targeted at manufacturing, export, and agriculture. Highly competitive but limited availability.
- Microfinance banks: 24–48% p.a. — More accessible for informal businesses. Require less documentation but charge higher rates.
- Fintech business loans (Moniepoint, Brass, Prospa): 30–60% effective APR — Fast disbursement, data-driven approval, but expensive for long-term financing.
FAQ
Most commercial banks require collateral equal to 100–150% of the loan value. Acceptable collateral includes: Certificate of Occupancy (C-of-O) on land/property, vehicle registration papers, fixed deposit (as lien), debentures over business assets, or personal guarantees from directors. Development finance institutions like BOI sometimes accept receivables or equipment as collateral for sector-specific loans.
Bank of Industry (BOI) loans: business must be registered with CAC, minimum 1-year operation, and in eligible sectors (manufacturing, agro-processing, solid minerals). DBN loans are accessed through commercial banks and microfinance banks — approach your bank and ask if they participate in DBN lending. NIRSAL MFB targets agriculture and healthcare. Interest rates range 9–15% p.a., significantly below commercial rates.
Yes. Interest on genuine business loans is a deductible expense for Companies Income Tax (CIT) and Personal Income Tax (PIT) purposes. Keep all loan agreements and bank statements. The deductible amount is the interest portion of your payments, not the principal repayment. This means the effective cost of your loan is reduced by your tax rate (e.g., at 30% CIT, a 25% interest rate effectively costs 17.5% after tax relief).