Separate four borrowing questions before calculating
| Question | Tool owner | Output boundary |
|---|---|---|
| What is the contractual payment and total scheduled interest? | business-loan-repayment | Payment frequency, term and balloon effect |
| How does principal roll through dated interest periods? | business-interest-cost | Draws, principal repayments, annual rate and day-count basis |
| What principal fits the business-declared cash ceiling? | business-loan-affordability | Cash available per period and user-selected cover; not eligibility |
| How does operating cash cover declared obligations in a downside? | debt-service-coverage | Disclosed cash numerator and debt-service denominator; no lender threshold |
Gather actual terms, periods and existing obligations
Minimum evidence before calculation
- Principal, nominal annual rate basis, payment frequency and number of payments. (not complete)
- Balloon, fees and other charges kept explicit rather than hidden in the rate. (not complete)
- Draws, principal repayments, accrual days and contractual day-count basis for interest reconciliation. (not complete)
- Cash available for debt service for the same payment period and a business-selected cover requirement. (not complete)
- Interest, principal, lease and other debt obligations included in the coverage denominator. (not complete)
- One currency and explicit indirect-tax, tax-deduction and fee exclusions. (not complete)
- Read the actual terms or label every value as a proposed scenario.
- Calculate the scheduled payment and total interest.
- Reconcile interest separately when draws, repayments, rates or day-count periods change.
- Set a payment ceiling from declared cash and the business-selected cover requirement.
- Define the operating-cash numerator and all required obligations, then run a downside case.
- Stop for incomplete terms, missing obligations or a breached business boundary and seek the relevant qualified review.
Compare repayment amount and total interest
The repayment planner owns the amortised payment schedule, total scheduled payments, total interest and balloon effect. The interest-cost planner owns period roll-forwards when principal, draws, repayments, rate or accrual basis changes. Do not force those different contracts into one copied formula.
Set an affordability ceiling from declared cash
Affordability starts with cash the business declares available per payment period and a user-selected cover requirement. The resulting principal ceiling is a stress-test output, not lender eligibility, approval probability or a recommendation to borrow that amount.
Stress debt-service coverage under a downside case
Four engine-derived outputs on a neutral-CU basis
These are labelled scenarios, not market terms. Currency is CU; repayment, affordability and coverage use a monthly payment period. Results are rounded for display from the registered engines.
| Check | Declared scenario inputs | Engine output | What it does not decide |
|---|---|---|---|
| Repayment | 12,000 CU principal; 6% nominal annual rate; monthly; 24 payments; no balloon | 531.85 CU/payment; 764.34 CU total interest | Does not prove affordability or approval |
| Interest reconciliation | 12,000 CU opening; two 180/185-day periods; 6%; 3,000 CU principal repaid in each period; 365-day basis | 538.77 CU total period interest; 6,000 CU ending principal | Does not replace the contract schedule |
| Affordability ceiling | 1,000 CU/month available; user-selected 1.25× cover; 6%; 24 monthly payments; 20% downside | 18,050.29 CU base principal ceiling; 14,440.23 CU downside ceiling | Does not establish eligibility |
| Coverage | 1,200 CU/month operating cash; 60 interest + 740 principal; 20% downside; user-selected 1.25× minimum | 1.50× base; 1.20× downside; downside misses the selected boundary | Does not state a lender threshold |
| Signal | Bounded response | Stop condition |
|---|---|---|
| Available operating cash falls 20% | Re-run affordability and coverage on the same obligation basis | Required cash boundary is breached |
| Rate, term, balloon or fees differ from the scenario | Re-enter the actual contract terms | Terms or day-count basis cannot be verified |
| Another lease or debt payment is discovered | Add it once to the declared denominator | Obligations remain incomplete |
Stop for missing terms, breached boundaries or professional review
Run each borrowing check separately
- Business Loan Repayment Planner
Compare periodic loan repayments and total interest across financing terms
- Business Interest Cost Planner
Compare total interest under rate, drawdown and repayment scenarios
- Business Loan Affordability Planner
Set a borrowing ceiling from available cash flow and downside cover
- Debt Service Coverage Planner
Stress-test operating cash coverage of scheduled debt obligations
Borrowing and cash-coverage questions
- Are repayment amount and total interest the same question?
- No. Payment is the scheduled amount per period; total interest reconciles financing cost across the declared schedule and terms.
- Does the affordability result mean a lender will approve the loan?
- No. It is a ceiling from user-entered cash and cover assumptions. It does not test eligibility, collateral, covenants or lender policy.
- Why can debt-service coverage calculations differ?
- The operating-cash numerator and obligation denominator may differ. Declare both, the period and every included debt payment before comparing results.
- What is a good coverage ratio?
- This Global guide provides no universal threshold. Use a documented business or contract boundary and verify the lender definition separately.
- Why run a downside case?
- It exposes whether a declared cash reduction breaches the selected boundary. It does not predict that the downside will occur.
- When should the cash-flow review be used?
- Use it when exact receipt and payment dates determine whether cash is available, including the timing of scheduled debt payments.
Sources and jurisdiction boundary
- US SBA: Loans overview — US Small Business Administration: US context only: actual terms and requirements vary. No US eligibility rule is applied globally.
- FDIC: Need a loan for your new small business? — US Federal Deposit Insurance Corporation: US educational context for reviewing actual terms and repayment source; not product or lender advice.