Calculator
Practice purchase loan
calculator.
Estimate the loan you would need to buy a practice, the monthly repayment and the total cost, and see how the repayments compare with the practice’s annual profit.
How it works
How the figures are worked out.
The loan amount is the purchase price less the deposit or cash you are putting in. The calculator then assumes a standard repayment loan: the same payment every month, covering interest and part of the capital, so the balance is cleared by the end of the term. The monthly payment uses the usual amortisation formula, with the annual rate divided by twelve.
Total interest is everything you pay over the term less the amount borrowed. If you enter an arrangement fee, it is worked out as a percentage of the loan and shown as a separate cost.
If you enter the practice’s annual profit, the calculator adds up a year of repayments and shows them as a percentage of that profit, and as cover: profit divided by a year of repayments. It is a quick way to see how much room the practice would have after paying for the loan. It leaves out tax, drawings and any existing borrowing.
Illustrative only. The figures are estimates based on the numbers you enter, including any rates and fees, which are your own assumptions. They are not a quote, an offer of finance or the rate you would be offered. Lenders decide eligibility, rates and terms.
Professional Practice Loans is a broker, not a lender: we search the market for lenders suited to your practice. Finance of £25,000 or less for sole traders and small partnerships can be regulated consumer credit. We'll tell you at the outset if that applies to your firm.
Questions
About this calculator.
What does the practice purchase calculator include?
It estimates the loan amount (price less your cash in), the monthly repayment on a standard repayment loan, total interest, an arrangement fee if you enter one, and the total repayable. Professional fees, due diligence and the other costs of buying are not included, so budget for them separately.
What does profit cover mean?
Here it is the annual profit you enter divided by a year of loan repayments. A figure of 2.00x means the profit is twice the yearly repayments. Lenders use their own measures of affordability, based on the accounts and projections, so treat it as a rough guide only.
Is the rate in the calculator a real rate?
No. The starting rate is an example for you to change. The rate a lender offers depends on the practice, the buyer, the profession, the deal structure and any security, so enter the rate you have been quoted or want to test.
Can I borrow the whole purchase price?
It depends on the lender and the practice. Many purchases are funded with a mix of the buyer’s own cash and a loan, and sometimes deferred consideration agreed with the seller. Our guide to buying a professional practice covers the costs to plan for.
Let's talk
Want real figures
for your practice?
A calculator can only use the numbers you give it. Tell us what the funding is for and we will search the market for lenders suited to your practice. No obligation.
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