Calculate your potential loan amount based on your average monthly bank statement deposits.
Understanding Bank Statement Loans and How This Calculator Works
A bank statement loan is a type of business financing that lenders approve based on a business's historical cash flow, as evidenced by its bank statements, rather than solely relying on traditional credit scores. This makes them an attractive option for small businesses, startups, or those with inconsistent credit histories who may not qualify for conventional loans.
Lenders offering bank statement loans primarily examine the inflow of funds into your business bank account. They look for consistent, verifiable deposits that indicate a stable revenue stream. This method allows lenders to assess your business's ability to repay a loan based on actual transaction data.
How the Bank Statement Loan Calculator Works:
This calculator provides an *estimated* maximum loan amount you might be eligible for, based on the information you provide. The core of the calculation involves:
Average Monthly Deposits: This is the foundational figure. You'll typically calculate this by summing up all deposits from your bank statements over a period (often 3-6 months) and dividing by the number of months. Consistent, verifiable deposits are key.
Loan Multiplier: Lenders use a multiplier (or factor rate) to determine the potential loan amount relative to your average monthly deposits. This multiplier can vary significantly based on the lender, your business's industry, the stability of your revenue, and the overall economic conditions. Common multipliers might range from 0.5x (meaning you could borrow half of your monthly deposits) to 2.0x or even higher in some cases. This calculator allows you to input your own expected multiplier or one provided by a potential lender.
Minimum Required Balance (Optional): Some lenders may stipulate a minimum average balance that must be maintained in your account. If this is a requirement, you might need to factor it in as it could influence the net available funds for loan repayment or simply be a covenant of the loan. This calculator subtracts this amount from the potential loan amount if provided, giving a more conservative estimate of funds available after meeting a minimum balance requirement.
The Calculation:
The primary calculation is:
Potential Loan Amount = Average Monthly Deposits * Loan Multiplier
If a minimum balance is provided, it is then subtracted:
This calculator is a useful tool for initial planning. It's crucial to remember that actual loan offers will depend on a lender's specific underwriting criteria, a thorough review of your bank statements, and potentially other factors like time in business, industry, and overall financial health. Always consult with a lender for precise loan terms and eligibility.
function calculateLoan() {
var avgDepositsInput = document.getElementById("averageMonthlyDeposits");
var multiplierInput = document.getElementById("loanMultiplier");
var minBalanceInput = document.getElementById("minimumBalance");
var resultDiv = document.getElementById("result");
var avgDeposits = parseFloat(avgDepositsInput.value);
var multiplier = parseFloat(multiplierInput.value);
var minBalance = parseFloat(minBalanceInput.value);
// Clear previous error messages or results
resultDiv.innerHTML = ";
var isValid = true;
if (isNaN(avgDeposits) || avgDeposits <= 0) {
avgDepositsInput.style.borderColor = "red";
isValid = false;
} else {
avgDepositsInput.style.borderColor = "#ccc";
}
if (isNaN(multiplier) || multiplier <= 0) {
multiplierInput.style.borderColor = "red";
isValid = false;
} else {
multiplierInput.style.borderColor = "#ccc";
}
if (!isNaN(minBalance) && minBalance 0) {
estimatedLoan = potentialLoan – minBalance;
}
// Ensure the result is not negative
if (estimatedLoan < 0) {
estimatedLoan = 0;
}
resultDiv.innerHTML = "Estimated Loan Amount: $" + estimatedLoan.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "";
}