Easily Calculate Business Loan ROI

Aloan can be a valuable investment for your business. By using financing responsibly, you can help your company maintain its competitiveness and grow.

But how do you determine what kind of return you could see on your investment (ROI)?  We’re letting you in on what you need to know.

Even if math isn’t your strong suit, find out how to calculate business loan ROI in a few simple steps.

How to Calculate ROI in Business When Taking Out a Loan
When you’re looking to calculate the ROI from a business loan, you’ll need to know the financing costs, such as interest rate and lender fees. You’ll also need to know the profits you’ll get from the investment, in this case, the loan. Understanding your expected ROI can help you decide if it makes sense to get financing.

Here’s the formula for calculating ROI:

(Net Profit / Investment) x 100 = ROI

Net profit refers to the profits you expect to get from your loan proceeds minus financing fees.

Investment refers to the loan amount, including interest and fees.