Kabbage loan calculators are great for small business owners, like me, that get easily confused with all the figures, calculations, fees and need help in determining the cost of their business loans.
Luckily many top lenders, including my recommendation Kabbage, have created multiple and interactive online calculators to help you better understand the financials of your loan such as percentage rates, APR, fees, agreement, repayment amounts, and terms.
In fact, there are three distinct loan calculators for you to view all aspects of your capital cost, even down to the cost per dollar and run projections on how investing your loan into our business pays off in return on investment.
These are the different loan calculators available at Kabbage. Keep reading for further details including examples of loan calculated with these tools.
- Business Loan Calculator – calculates your principal, interest and payment amount and schedule based on your total loan amount.
- ROI Loan Calculator – Demonstrates your ROI (return on investment) from your loan proceeds invested into your business for specific needs such as inventory, equipment, marketing, and hiring.
- SMART Box – this capital comparison tool is a detailed listing of many metrics including your loan, rates, agreement, repayment amount and schedule which will be sent to you customized for your loan package.
This interactive, easy-to-use tool will help you quickly estimate your monthly payments on your Kabbage loan or line of credit. Just slide the bar to your desired loan amount you instantly you will see the fees (usually zero), payments, and even ways you can to save with early payments.
Note that this Loan Calculator uses sample fee rates, yours may differ depending upon your length of time in business, profitability, and credit scores. However, know that Kabbage does not require a minimum credit score to qualify for your business line of credit.
This is the best Loan Calculator at Kabbage that I recommend my small business clients use because it is the most helpful for business decision making. It demonstrates the real world example of how your business is built by utilizing your working capital loan.
While knowing your loan rate, fees, and APR is important, and which you can find on the other loan calculators and your SMART Box statement (which is explained in detail next) it does not help you make the decision whether the cost of capital is a good business decision and “worth it”.
I find it more beneficial to use this ROI calculator to make projections of the value of the loan to my business in terms of return on percentage. It’s great because it has four different types of business investments dependent upon your particular situation and industry. Choices include; inventory for retailers both online and offline, equipment for manufacturers, restaurants and beauty salons, marketing for trade shows and advertising campaigns, and hiring for new locations and expansion.
Using the calculator is simple and straightforward. As an example, I chose the inventory section and I only needed to enter three bits of information; cost per unit, number of units, sales price per unit. Since you probably sell a variety of items with different costs and price points use an average of your merchandise lines.
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In the calculator I entered, $25 for cost per unit, 1,000 units sales price $55 per unit and got a calculation of $27,000 ROI with a 96.43%!
What this means is that by investing the $28,000 loan (total cost including interest and fees) in this manner I would both pay off the loan and make an additional $27,000 or almost hundred percent return on my investment. Nice. 🙂
Now you can see why this is a much better decision-making tool for business people because you can essentially walk through the process of calculating the loan amount you need, estimating your investment cost and get projection figures for ROI return on investment in minutes. I remember taking hours crunching numbers to calculate ROI – wish I had this calculator instead! Try it for yourself
SMART Box – The capital comparison tool
This new tool was developed to allow borrowers to clearly see all fees, loan rates payments and agreements in an easily understandable and simple format and thus be able to better compare loan options. The initiative was spearheaded in 2016 by the trade association Innovative Lending Platform Association, including members such as Kabbage, OnDeck and CAN capital.
There are different versions of the SMART box tool for term loans, lines of credit and merchant cash advances. Each particular version accounts for the differences between the finance options but retains the common metrics and calculations.
This industry-first pricing disclosure was developed to empower small businesses to better understand their financing options and their related costs. The company said, “The ultimate goal was to enable business owners to have an apples to apples comparison of different financial options”.
However, some industry experts have criticized their inclusion of annual percentage rate APR. This is because the APR metric is an unreliable and misleading figure. Recently Forbes published an article where bankers discussed why using APR for comparison is not recommended since it often overstates the total cost of loans to the borrower which could discourage some small businesses from applying for credit that is actually cheaper than they think.
Additionally, APR has been shown by recent studies to be misunderstood by the majority of small businesses in America.
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Your custom SMART smart box statement will include vital information about your business loan such as:
- Example loan amount
- Disbursement amount (minus fees withheld)
- Repayment amount
- Term (repaid monthly)
- Total cost of capital – this is the total amount that you will pay in interest and loan fees for the loan.
- Interest expense
- Loan fees – origination fee and other fees
- Annual percentage rate (APR) – this is the cost of the loan expressed as a percentage which takes into account the amount and timing of the loan you receive, your fees and your repayments. >Reminder APR is not recommended to be used for comparison purposes because it is not an actual interest rate or loan fee.
- Average monthly payment – repayment amount divided by the number of months term six or 12 months
- Specific monthly schedule of payment amount for months one through six and
months seven through 12
- Cents on the dollar – this is the total amount of interest or loan fee paid per dollar borrowed on the loan it does not include fees.
- Does prepayment of this loan result in any new fees or charges – No, see section 1.5 of the loan agreement
- Does prepayment of this loan decrease the total interest or loans owed?
Yes. see section 1.5
Below is an example of a smart box statement.
Check out my guide on how to start your business right with tons of useful tips I learned by successfully starting, building, and selling multiple companies.