When do business loan repayments start after

2 min read

~1 monthFirst repayment

From drawdownInterest accrues

HolidaySometimes offered

DiariseThe first date

The standard timing

On most term loans the first repayment falls roughly a month after drawdown, on a fixed monthly cycle thereafter. Interest begins accruing from the day the funds leave the lender, not from the first payment, so the money starts costing you immediately even if the first instalment is weeks away.

Payment holidays and structures

Some facilities offer an initial capital holiday — you pay interest only, or nothing, for a short period before full repayments begin. This can help if the borrowed funds take time to generate return, but it usually increases the total cost. Check the facility letter for the exact schedule.

Planning the first payment

Set up the direct debit or standing order as soon as you draw down, and diarise the first date so it never surprises your cash flow. Missing an early payment does real damage to a new relationship. The repayment calculator gives you the full schedule, and a cash-flow forecast helps you slot repayments in.

Frequently asked questions

Do I pay interest before the first repayment?

Interest accrues from drawdown, so yes — even though the first instalment may be a month away, the loan is costing you from day one. The first payment typically covers that first period's interest plus capital.

Can I get a payment holiday at the start?

Some lenders offer an initial interest-only or capital-holiday period. It eases early cash flow but usually raises the total cost, so weigh it rather than taking it automatically.