Business Loan Calculator
Calculate commercial business loan monthly repayments, interest expenses, and loan payoff terms.
Repayment Summary
Reading a business borrowing offer
Business lending is quoted less consistently than consumer credit, and the quoted rate is often not the cost. Always compare on APR, which folds origination fees, closing costs and other charges into a single annualised figure. A 9% rate with a 4% origination fee is not a 9% loan.
Watch for factor rates, which appear on merchant cash advances and some short-term products. A factor of 1.3 on $50,000 means repaying $65,000 — and because repayment is usually compressed into months rather than years, the equivalent APR is frequently in the high double or triple digits. It is not comparable to an interest rate and should not be treated as one.
Structure matters as much as price. SBA-backed loans offer longer terms and lower rates at the cost of a slower, more document-heavy process. A term loan suits a defined purchase; a line of credit suits fluctuating working capital and charges only on what is drawn. Most small-business borrowing also requires a personal guarantee, which puts your own assets behind the debt and substantially undoes the liability protection of the company structure — worth understanding before signing rather than after.
Frequently asked questions
How to calculate business loan payments?
Business loan payments are calculated using standard loan amortization formula based on principal, annual interest rate, and term length.
What do lenders look at for a business loan?
Typically the five Cs: character (credit history), capacity (cash flow to service the debt), capital (owner investment), collateral, and conditions (the industry and economy). Debt service coverage ratio - operating income divided by debt payments - is the number most commonly used, with 1.25 a frequent minimum.
What is an SBA loan?
A loan from a conventional lender that carries a partial guarantee from the US Small Business Administration, which reduces the lender's risk and so widens access. The 7(a) programme is the general-purpose option and 504 is for real estate and equipment. Rates are capped relative to prime, but paperwork and funding timelines are considerably longer than conventional lending.
Is a merchant cash advance a loan?
Legally no, which is the problem. An MCA buys a share of future receivables and is priced with a factor rate rather than an interest rate, so it sidesteps lending disclosure rules. Effective APRs frequently exceed 50% and sometimes reach triple digits. Convert any factor rate to an APR before comparing it with a conventional loan.