Business Loan Calculator
Calculate loan payments, interest costs, and repayment schedules.
Loan Details
Amount of business financing needed
Term loans: 7-15% depending on qualifications
SBA loans can go up to 25 years
Business Information
Gross annual revenue
Total annual operating expenses
Current business loan payments
Personal guarantor credit score
Years of business operation
Fees & Terms
Upfront loan fee (typically 1-5%)
Application and underwriting fee
Collateral
Loan Analysis
Monthly Payment
Principal & Interest
Total Interest
Over loan term
APR
Including fees
Principal vs Interest
Qualification Analysis
Key Factors:
- • Good credit score
- • Established business (2+ years)
- • Good revenue ($500K+)
- • Excellent profit margin (20%+)
- • No collateral (unsecured loan)
Cash Flow Impact
⚠ Tight cash flow - consider smaller loan amount
Loan Summary
Loan Timeline
Business Loan Tips
- • SBA loans offer lower rates but longer approval times
- • Maintain debt service coverage ratio above 1.25x
- • Strong financial records improve qualification chances
- • Consider seasonal cash flow variations
- • Shop multiple lenders for best terms
- • Factor loan payments into business planning
How it works
A business loan calculator amortizes the borrowed amount into fixed payments and shows the total cost. The headline number for a business is the APR — which folds in origination and other fees — since that's the true cost of capital you'll compare against the return the borrowed money should generate.
Monthly payment & true cost
M = P · r(1 + r)ⁿ / [(1 + r)ⁿ − 1]
- P
- loan principal
- r
- monthly rate (APR ÷ 12)
- n
- number of payments
Worked example
- Borrow P = $50,000 at 8% APR
- 5-year term → n = 60, r ≈ 0.00667
- (1 + r)ⁿ = 1.00667⁶⁰ ≈ 1.490
- M = 50,000 × 0.00667 × 1.490 ÷ (1.490 − 1)
Payment ≈ $1,014/month, about $10,800 in total interest.
Good to know
- Compare the APR (with fees) against your expected return on the capital — borrow only if the investment clears that hurdle.
- Watch for daily-interest or factor-rate products (common in merchant cash advances) — their effective APR can be far higher than it looks.
- Term length trades a lower payment against more total interest and a longer obligation on the books.
Related Calculators
Frequently Asked Questions
How are business loan payments calculated?
Term loans amortize like any installment loan: M = P × r(1+r)ⁿ / [(1+r)ⁿ − 1]. Borrowing $50,000 at 8% APR over 5 years costs about $1,014 per month and roughly $10,800 in total interest.
What is the difference between APR and a factor rate?
APR expresses annualized cost including fees; a factor rate (common in merchant cash advances) is a flat multiplier like 1.3 on the amount advanced. Because factor-rate products are repaid quickly, their effective APR is often far higher than the multiplier suggests — convert to APR before comparing.
What do lenders evaluate on a business loan application?
Time in business, revenue and cash flow, business and personal credit scores, existing debt, and often collateral or a personal guarantee. SBA-backed loans offer competitive rates and long terms but require more documentation and time to close.
Should I choose a shorter or longer repayment term?
A longer term lowers the monthly payment, easing cash flow, but raises total interest and keeps the obligation on your books longer. Match the term to the life of what you are financing — short for working capital, longer for equipment or real estate.
When does taking a business loan make sense?
When the expected return on the borrowed capital clearly exceeds the loan's APR — financing equipment, inventory, or expansion that generates revenue above the cost of the debt. Borrowing to cover persistent operating losses, by contrast, usually compounds the problem.