Bill Gates, Founder of Microsoft, knows the importance of technical knowledge. He once said:
“The advance of technology is based on making it fit in so that you don’t really even notice it, so it’s part of everyday life.“
Business owners, just like Bill Gates, always rely on technology; whether marketing their products or contemplating their next steps to finance their operations. If they decide to take out a business loan, they want to crunch numbers beforehand to find out associated costs like interest, closing costs, and monthly payments.
They do that by using an online business loan calculator like the following by Camino Financial. This technological tool lets you know whether you should get a loan and the total costs you pay during the life of the loan.
Let’s get acquainted with Emilia Martinez, a business owner whose business was in trouble. She decided she needed a business loan but was unsure whether she could actually afford it.
Business Loan Calculators are Simple to Use
Emilia started her own business 2 years ago, and it has brought her profound joy ever since. But her daycare center struggled to keep up some months ago.
She and her staff were constantly writing and printing notes to themselves and directed at parents. They also had to update all the records manually. For years she has provided childcare to working parents in the community and has built an excellent reputation.
Now, parents want daily updates on their children via a mobile app and prefer to make payments electronically. Some parents have even gone as far as choosing a different facility that provides these services.
Emilia doesn’t want to continue to lose customers because she’s reluctant to add these technological aids to her business model. But she knows doing so would bring them back. Many parents who left have told her they prefer her daycare center over others and have promised to return if she can provide these requested services.
She realizes a customer relationship management software (or CRM) would help her communicate with parents digitally and efficiently.
If she were to offer mobile payments, customers could pay her any time of the day.
Another business owner friend of hers suggests she should use a business loan calculator that’d allow her to select the loan amount, interest rate, and loan term. It makes automatic calculations and she can re-enter data to determine what amount is comfortable for her budget.
Emilia decides to borrow $15,000 to invest in needed technology and to market her business. She can repay $565 per month for 36 months at a monthly interest rate of 1.75%. After making the investment, she estimates that her net profit should be $750 per month.
Her friend also informs her that monthly payments shouldn’t exceed 80% of her monthly net profit. Moreover, the total cost of the loan must not exceed the investment’s total return.
She decided to apply for the loan because monthly payments don’t exceed 80% of her profit and in 36 months she will pocket $6,600 after paying off the loan. She was amazed at how helpful and easy a business loan calculator is to use.
It didn’t take but a few months for her former clients to return to her daycare center once the software was installed to streamline her services. She now has happy parents.
Business Loan Calculators Provide Quick Information
Before Emilia ever approached a lender, she knew the total costs of a loan by using a business loan calculator. She saw within minutes that a loan was a good investment for her business.
Emilia gained peace of mind knowing she could repay the loan comfortably without jeopardizing her business’s future. Like Emilia, are you facing a similar situation and still doubt whether you should take out a loan?
A business loan calculator doesn’t cost anything to use and provides answers to your questions instantly. You can review real costs and make an informed decision in advance before ever committing to a loan.