Can My Business Afford This Loan?
Running the numbers before you borrow can help you avoid a repayment that squeezes day-to-day cash flow. Stress-test how your business would cope with a new loan under normal conditions — and if revenue drops or costs rise.
Who it's for
Owners and directors of Australian small and medium businesses who are considering a new business loan and want a quick sense-check on affordability.
What it calculates
How a new loan repayment fits into your current monthly cash flow, and what happens to surplus cash if revenue falls or costs rise.
Why it matters
Loans that look affordable on a good month can become stressful in a slow one. Stress-testing helps you choose a safer repayment level before you apply.
Business Loan Affordability & Stress-Test
Business basics
Use last 6–12 months — all business income before expenses.
Wages, rent, inventory, marketing — excluding existing loan repayments.
Business loans, asset finance, overdraft interest, card minimums.
New loan scenario
Stress-test settings
Normal month
Stress-test month
Numbers comfortable? See real lender options.
If the numbers still look comfortable, the next step is to see what real lenders might offer based on your business and security position.
How this "Can my business afford this loan?" calculator works
The calculator compares your average monthly revenue and expenses against your existing loan repayments and the estimated repayment on a new loan. It then applies a stress-test by lowering revenue and increasing costs to show how your cash position might change in a tougher month. The traffic-light verdict summarises whether your chosen repayment looks broadly manageable, tight or high risk based on your numbers and the buffer level you prefer.
Normal cash = Revenue − Expenses − Existing repayments − New repayment
Stress cash = (Revenue × (1 − drop)) − (Expenses × (1 + rise)) − Existing − New
Repayments use standard amortisation: monthly payment = P × r ÷ (1 − (1 + r)−n), with weekly and fortnightly equivalents derived from the monthly figure for comparison.
How to interpret your results
- Green — Looks manageable. You have a clear surplus after all repayments in a normal month, and the stress-test still leaves a buffer. It doesn't guarantee approval, but the repayment level is in the right ballpark.
- Amber — Tight under stress. Think carefully about how you'd handle a slow period — by reducing expenses, using savings, or choosing a smaller loan or longer term. Amber doesn't mean "no" — it's a cue to be cautious.
- Red — High risk. The repayment is likely hard to manage, especially if conditions get tougher. Lower the repayment, rethink the project or speak with a specialist before proceeding.
- General guide only. This isn't financial advice or a lender credit assessment.
How to find a repayment that fits your budget
- Adjust loan amount, rate and term until the calculator shows a comfortable surplus in both the normal and stress views.
- Keep total finance repayments well below a level where a normal month already feels tight — especially if revenue is seasonal or project-based.
- Consider alternative structures (asset finance for equipment, an overdraft for short-term gaps) if a single term-loan repayment feels too large.
- If unsure, use the result as a starting point and speak with a lending specialist who can factor in more detail about your business.
Calculator assumptions
This calculator uses standard amortisation for the new loan repayment, treats existing repayments as a flat monthly figure, and applies revenue / cost stress evenly across the month. It assumes monthly cash-flow averages (not lumpy timing of receipts and bills), excludes tax, GST cycles and one-off items, and does not factor in lender establishment fees, ongoing fees or LMI-style premiums. Buffer thresholds (low / medium / high) drive how strict the verdict is. This is not financial, tax or credit advice. Reviewed by the LoanGorilla editorial team — last updated May 2026.