Loan calculator for seasonal (non-equal) payments (?)
I’m getting ready to sell my business, and revenue/profit are quite seasonal. I’m going to be carrying back part of the purchase price, and would like to offer the buyers the option to make lower payments in the slower months. Is there a loan calculator available that can show this, and preferably one that can produce an amortizations schedule?
We did some digging and couldn’t find a seasonal loan calculator with amortizations. However, there are some ways for your prospective buyer to figure out what the monthly payments would be.
One way would be to manually calculate the monthly payments. Start by figuring out what interest rate you want to charge and what the total payment for one year would be. For example, if your business is worth $250,000 and you’re charging 10 % interest on a 5 year loan, the total payment for one year would be $55,000. If you have 3 slow months each year, you might charge only $3,000 per month for those 3 months. For the other 9 months, you might charge $5,111. Your total payment for the year still comes out to $55,000.
Another alternative would be to use a merchant cash advance calculator, like this one. With merchant cash advances, a percentage of a borrower’s credit card receipts are deducted each day to repay a loan. Basically, this is revenue-based repayment. Although it’s not really seasonal the way you’ve described, the payment will differ each day based on whether the borrower had a lot of credit card sales that day or very few credit card sales.
I hope this helps. Let us know if you have any additional questions!