Business Loan Cashflow Impact Calculator

Start by calculating your monthly net cash flow after the loan repayment: subtract your monthly expenses and the new loan repayment from your monthly revenue. A healthy business should maintain a positive net cash flow with a comfortable buffer. Also check the revenue-to-repayment ratio — most lenders look for a ratio below 30–40% as a sign of manageable debt.

Yes, interest on business loans is generally tax deductible as a business expense, provided the loan funds are used for business purposes. The tax deduction effectively reduces the cost of the loan. For example, at a 25% company tax rate, a $10,000 annual interest cost only costs $7,500 after the tax deduction. This reduces your effective annual cost of the loan.

Most lenders in Australia consider a repayment-to-revenue ratio below 30% as comfortable, 30–50% as manageable but needs scrutiny, and above 50% as high risk. The right ratio depends on your industry and profit margins — businesses with higher margins can sustain higher ratios. Use this calculator to find your ratio and break-even point.