David is a Chartered Financial Analyst and former business loan officer, specializing in startup financing and cost-volume-profit analysis for loan applications.
This 4-in-1 Breakeven calculator helps you find the missing variable in your business plan. Enter any three values—Fixed Costs (including loan payments), Price per Unit, Variable Cost, or Breakeven Quantity—and we will solve for the fourth.
Business Loan Breakeven Calculator
Breakeven Formula (for Loan Planning)
Q = F / (P – V)
Solve for Fixed Costs (F):
F = Q * (P – V)
Solve for Price (P):
P = (F / Q) + V
Solve for Variable Cost (V):
V = P – (F / Q)
Formula Variables
- (F) Fixed Costs: All costs that do not change with sales, such as rent, salaries, insurance, and **monthly loan payments**.
- (P) Price per Unit: The selling price for one unit of your product.
- (V) Variable Cost per Unit: The costs directly tied to producing one unit (e.g., materials, direct labor).
- (Q) Breakeven Quantity: The total number of units you must sell to cover all costs (including your new loan).
Related Calculators
- Business Loan Calculator
- Startup Cost Calculator
- Contribution Margin Calculator
- Profit Margin Calculator
What is a Business Loan Breakeven Analysis?
A breakeven analysis is a financial calculation that shows the point at which a business’s total revenues equal its total costs. When applying for a business loan, this analysis becomes one of the most important parts of your business plan. It demonstrates to lenders that you understand exactly how much you need to sell to cover all your expenses, *including the new loan payment*.
The new loan payment is treated as a **Fixed Cost (F)**. By adding the monthly loan payment to your other fixed costs (like rent and salaries), you can calculate the new, higher breakeven quantity. This tells you (and the lender) how much your sales need to increase to support the new debt.
This calculator allows you to input three of the four key variables to solve for the missing one. For example, you can input your new total Fixed Costs (with the loan), your price, and your variable cost to see the new Breakeven Quantity (Q) you must achieve.
How to Calculate Breakeven with a Loan (Example)
-
Identify Variables (Before Loan)
A bakery has:
• Fixed Costs: $8,000/month (rent, salaries)
• Price per Cake (P): $40
• Variable Cost per Cake (V): $15 -
Add the Loan to Fixed Costs
The bakery gets a business loan with a $2,000 monthly payment. The *new* Fixed Cost is:
• New Fixed Costs (F): $8,000 + $2,000 = $10,000 -
Calculate Unit Contribution Margin
This stays the same. It’s the profit per unit before fixed costs:
P – V = $40 – $15 = $25 per cake -
Calculate the New Breakeven Quantity (Q)
Use the formula Q = F / (P – V):
Q = $10,000 / $25
Q = 400 cakes
The bakery must now sell 400 cakes per month (up from 320 before the loan) to cover all its costs.
Frequently Asked Questions (FAQ)
How does a loan payment affect my breakeven point?
A business loan payment is a fixed cost. This means it *increases* your total Fixed Costs (F). When F increases, your breakeven quantity (the number of units you must sell) also increases. You must sell more to cover this new monthly obligation.
Why is this important for a loan application?
Lenders need to see that you have a viable plan to repay the loan. By presenting a breakeven analysis that includes the new loan payment, you are proving that you understand your costs and have a clear sales target to remain profitable.
What is “Contribution Margin”?
The Contribution Margin is the profit you make on a single unit *before* accounting for fixed costs. The formula is `Price per Unit (P) – Variable Cost per Unit (V)`. In our example, it was $25. This is the amount each sale “contributes” to paying off fixed costs.
How can I use this calculator to see if I can afford a loan?
Enter your Price (P), Variable Cost (V), and your target monthly sales Quantity (Q). The calculator will solve for Fixed Costs (F). This number is the *maximum* total fixed costs your business can support. If this number is higher than your current rent + salaries + new loan payment, your plan is viable.