Franchise loan repayments: what $50,000, $100,000 and $250,000 cost each month

• Every figure in this guide is illustrative: monthly principal and interest repayments, a rate unchanged for the whole term, and no fees or charges.
• The assumed rates are 7.5%, 9% and 11% a year. For reference, the RBA's average for new small-business loans was 7.44% in July 2026.
• A longer term lowers the monthly repayment but adds interest: $100,000 at 9% costs about $24,550 in interest over 5 years and about $52,011 over 10 years.
• Fees, security costs and break costs can add materially to the total, so compare the full cost of each offer.
• Moneysmart notes that responsible lending obligations don't apply to business loans, so your own affordability checks matter more.
• The franchise loan calculator runs these sums for your own amount, rate and term.

Most term loans use the standard amortisation formula, which spreads principal and interest into equal repayments. Here it is step by step.

1. Convert the annual rate to a monthly rate: r = annual rate ÷ 12. At 9% a year, r = 0.0075.
2. Count the repayments: n = years × 12. Over 7 years, n = 84.
3. Apply the formula: repayment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the amount borrowed.
4. For $100,000 at 9% over 7 years, that gives about $1,609 a month.
5. Multiply the repayment by n for the total repaid: about $135,148, so total interest is about $35,148.
6. Early repayments are mostly interest and later ones mostly principal, which is why extra repayments made early save the most interest.

Assumptions for this and the next two lists: monthly principal and interest repayments, the rate unchanged for the whole term, no fees, rounded to the nearest dollar.

• $50,000 over 5 years at an assumed 7.5%: about $1,002 a month, with about $10,114 in total interest.
• $50,000 over 5 years at an assumed 9%: about $1,038 a month, with about $12,275 in total interest.
• $50,000 over 5 years at an assumed 11%: about $1,087 a month, with about $15,227 in total interest.
• $50,000 over 7 years at an assumed 7.5%: about $767 a month, with about $14,421 in total interest.
• $50,000 over 7 years at an assumed 9%: about $804 a month, with about $17,574 in total interest.
• $50,000 over 7 years at an assumed 11%: about $856 a month, with about $21,914 in total interest.

• $100,000 over 5 years at an assumed 7.5%: about $2,004 a month, with about $20,228 in total interest.
• $100,000 over 5 years at an assumed 9%: about $2,076 a month, with about $24,550 in total interest.
• $100,000 over 5 years at an assumed 11%: about $2,174 a month, with about $30,455 in total interest.
• $100,000 over 7 years at an assumed 7.5%: about $1,534 a month, with about $28,842 in total interest.
• $100,000 over 7 years at an assumed 9%: about $1,609 a month, with about $35,148 in total interest.
• $100,000 over 7 years at an assumed 11%: about $1,712 a month, with about $43,828 in total interest.
• $100,000 over 10 years at an assumed 9%: about $1,267 a month, with about $52,011 in total interest.

• $250,000 over 5 years at an assumed 7.5%: about $5,009 a month, with about $50,569 in total interest.
• $250,000 over 5 years at an assumed 9%: about $5,190 a month, with about $61,375 in total interest.
• $250,000 over 5 years at an assumed 11%: about $5,436 a month, with about $76,136 in total interest.
• $250,000 over 7 years at an assumed 7.5%: about $3,835 a month, with about $72,104 in total interest.
• $250,000 over 7 years at an assumed 9%: about $4,022 a month, with about $87,871 in total interest.
• $250,000 over 7 years at an assumed 11%: about $4,281 a month, with about $109,571 in total interest.
• $250,000 over 10 years at an assumed 9%: about $3,167 a month, with about $130,027 in total interest.

A loan this size may need security, such as property. business.gov.au notes that with a secured loan, the lender can take the security to cover its losses if you don't repay.

Some loan structures lower the early repayments. They don't make the loan cheaper.

• Interest-only: $100,000 at an assumed 9% costs $750 a month while you pay interest only. After 12 months of that, 6 years of principal and interest cost about $1,803 a month, and total interest is about $38,784, against about $35,148 on a straight 7-year loan.
• Balloon (or residual) payment: a large final payment lowers the regular repayments. business.gov.au warns that you'll need to plan for that lump sum when the term ends.
• Illustrative balloon: $60,000 at an assumed 8.5% over 5 years costs about $1,231 a month with no balloon, or about $989 a month with an $18,000 (30%) balloon, but total interest rises from about $13,860 to about $17,352.
• Use these structures only if your cash-flow forecast shows why you need them and how you'll meet the step-up or the balloon.
• Make sure no loan runs longer than your franchise agreement, or you could still owe money after the franchise has ended.

business.gov.au recommends reading each loan's terms and comparing these features before you apply.

• Upfront and ongoing charges, such as establishment, valuation, legal and account-keeping fees.
• The interest rate, and whether it's fixed or variable.
• Minimum and maximum loan amounts, and the terms available.
• Whether you must provide security, and what can happen to it if you default.
• Restrictions and conditions, such as limits on extra repayments, early payout fees and break costs on fixed rates. Moneysmart suggests asking lenders about break costs directly.
• Broker costs: business.gov.au notes some brokers charge for their services, while others are free to you and paid a commission by the lender.
• Whether a personal guarantee is required. Moneysmart warns a guarantor may have to repay the whole loan plus interest if the borrower can't.

1. Put the repayment into a 12-month cash-flow forecast from the first month, even if the franchise will take months to reach break-even.
2. Compare the repayment with your projected profit before you pay yourself. If the repayment takes most of it, the loan is too big.
3. Check whether the franchisor's earnings information includes loan costs. Under the Franchising Code, a projection must say whether it includes the cost of servicing loans.
4. Stress-test the repayment at a higher rate and your forecast at lower sales.
5. Keep a working capital reserve outside the loan for slow months.
6. Use the franchise break-even calculator to see the sales needed to cover the repayment and your other fixed costs.

• I have written quotes from at least two lenders.
• I've calculated the monthly repayment and total interest for each quote.
• I've listed every fee, including early payout fees and break costs.
• I understand the security and any guarantee, and I've had independent legal advice on them.
• No loan term runs past the end of my franchise agreement.
• The repayment is in my cash-flow forecast and my stress test.
• I've asked my accountant how interest and fees are treated for tax.