Work out what percentage fees plus fixed charges cost on a business loan, and how much cash reaches your account if they are deducted.
Use this calculator when a term sheet lists a percentage fee (a lender's commitment or origination fee, or the 2% registration fee on a Canada Small Business Financing Program loan) plus fixed charges such as legal fees, an appraisal, environmental report or registration of security. Enter any amount the lender holds back at closing, such as a required deposit, under other amounts.
How it works. Total fees = loan amount x percentage fee + fixed charges. Cash received = loan amount - total fees - amounts held back. If the fee is added to the loan instead of deducted, you receive the full amount but pay interest on the fee for the life of the loan.
Worked example (illustrative). A $300,000 CSBFP term loan carries a 2% registration fee, $6,000. With $3,500 of legal and appraisal costs, total fees are $9,500, or about 3.2% of the loan. If both are deducted, $290,500 reaches your account, so a $300,000 purchase needs $9,500 of your own cash.
Limits. This tool does not turn fees into an annual percentage rate. For that, see the true cost of fees guide, which shows the arithmetic. Fee levels vary by lender and are examples only.
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