What is a business loan calculator?
A Business Loan Calculator estimates the payment, total interest and true cost of a business term loan, including origination, documentation and other fees. It also shows the real APR, which is higher than the stated rate when fees are deducted from the loan. Business owners can use it to compare offers for equipment, expansion or working capital.
How to use it
- Enter the loan amount and interest rate, and choose how interest is compounded.
- Enter the loan term in years and months and how often you pay (monthly, every two weeks or weekly).
- Enter any origination fee (%), documentation fee and other fees.
- Click Calculate to see the payment, total payments, interest, fees, real APR and an amortization table.
Business loan formula
M = P × r(1 + r)^n ÷ ((1 + r)^n − 1)
where M is the payment, P is the loan amount, r is the interest rate per payment period and n is the number of payments. The real APR is the rate at which those payments repay only the cash you actually receive after fees.
Example
A $200,000 loan at 9% for 10 years, repaid monthly, costs about $2533.52 a month, with about $104,022 in total interest. Over 5 years the payment rises to about $4151.67, but total interest falls to about $49,100.
Business loan interest rates
Lenders price business loans using your credit history, revenue, time in business, collateral, the loan amount and the term. Bank loans, SBA-backed loans, equipment financing and short-term online loans can have very different rates and fees, so compare offers by APR and total cost rather than by the advertised rate alone.
SBA loans
Loans partly guaranteed by the US Small Business Administration can be used for expansion, equipment, real estate and working capital. Each SBA program has its own maximum amount, term and rate rules, set by the SBA and the lender. If you know the amount, rate and term of an SBA offer, this calculator can estimate the payment; confirm details at sba.gov.
What affects your business loan payment?
- Loan amount: borrowing more raises the payment.
- Interest rate: a higher rate raises both the payment and total interest.
- Term: a longer term lowers the payment but adds interest.
- Fees: origination and other fees raise the true cost.
- Payment frequency: some lenders require weekly or biweekly payments.
Tips
- Make sure the payment fits comfortably within your monthly cash flow, including slow months.
- Compare the real APR of each offer, not just the interest rate.
- Ask whether there is a prepayment penalty before you plan to pay early.
- Keep your business and personal finances separate to make applications easier.
Frequently Asked Questions
At 9% for 10 years, a $200,000 business loan costs about $2533.52 a month. At 9% over 5 years it is about $4151.67. Fees will raise the true cost.
There is no single rate that is best for every business. Rates vary according to the lender, loan type, borrower qualifications, credit profile, business history, collateral, and other factors. Compare the complete cost of multiple offers rather than choosing a loan based only on its advertised rate.
Yes. A calculator can estimate payments for an SBA loan when you know the loan amount, interest rate, and repayment term. Actual payments can vary because of program requirements, lender terms, fees, and other costs.
Origination and other fees are usually deducted from the loan or paid up front, so you receive less money but repay the full amount plus interest. The real APR spreads those fees over the term to show your true yearly borrowing cost.
Enter the principal amount, annual interest rate, and repayment term into a business loan calculator. The tool uses these values to estimate the periodic payment.
Disclaimer: This calculator gives estimates for general information only. It is not financial, tax or legal advice. Results depend on the numbers you enter and on simplified assumptions, so your actual figures may differ. Check important decisions with a qualified professional or the official source.
Related Calculators
For other business and borrowing calculations, try these calculators.