Handling of loans, interest and principal (repayment) Follow

Business Plan Pro handles loans, interest, and repayment following standard accounting convention.

Business Plan Pro does not calculate a loan amortization schedule for you and as such does not require your loan terms. Instead you enter the payments you expect to make. If you do not have documentation on repayments already, your local bank, a standard financial worksheet, or even a financial calculator can give you the detailed repayment schedule to use with Business Plan Pro.

  • New loans (during start-up) are entered into the Start-up Funding table.
  • New loans (after start-up) are entered into the Cash Flow table in the upper section as cash received.
  • Principal repayments are entered into the Cash Flow table in the lower section, as a cash spending item.
  • Interest Rate is entered into the General Assumptions table.
  • Interest Expense, is an expense deductible against income, it is calculated and appears in the Profit and Loss statement*. Business Plan Pro calculates interest automatically based upon the current loan balance and the interest rate (set within the General Assumptions table).

* Some people are confused by the concept of separating the payment into interest and principal but it is the correct way to show loan payments in a business plan. A common example, at least in the United States, is making payments on a mortgage.

Most lending institutions clearly separate payments into interest and principal components. Even if you write a single check each month to repay the mortgage loan, the payment is divided into interest and principal.


If you understand how to program spreadsheet formulas, you can also use the built-in Principal Payments function (PPMT). An example is provided on the help page: Expanded Principal Payments Formula

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