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Estimate your monthly payments and total interest cost for a business loan.
$1,050.09
Everything you need to know
Securing financing is one of the most critical decisions a business owner makes. Whether you're launching a startup, expanding operations, purchasing equipment, or managing cash flow, understanding the true cost of borrowing is essential. Our business loan calculator provides a complete picture of your loan:
Business loans typically use amortizing installment loans with fixed monthly payments:
M = P [r(1+r)^n] / [(1+r)^n - 1]
Where:
Loan: $100,000 at 8% annual interest for 5 years
M = 100,000 × [0.006667(1.006667)^60] / [(1.006667)^60 - 1] M = 100,000 × [0.006667 × 1.490] / [1.490 - 1] M = 100,000 × 0.009933 / 0.490 M = $2,027.64 per month
Total paid: $2,027.64 × 60 = $121,658.40 Total interest: $121,658.40 - $100,000 = $21,658.40
| Loan Type | Best For | Typical Rates | Terms |
|---|---|---|---|
| SBA 7(a) | General business purposes | 7.5% - 13% | Up to 25 years |
| SBA 504 | Real estate & equipment | 5.5% - 7% | 10-25 years |
| Term Loan | Expansion, working capital | 6% - 30% | 1-10 years |
| Equipment Loan | Machinery, vehicles | 5% - 20% | 1-7 years |
| Line of Credit | Cash flow gaps | 7% - 25% | Revolving |
| Invoice Financing | Unpaid invoices | 1% - 5% monthly | Until invoice paid |
| Merchant Cash Advance | Quick funding | 20% - 250% APR | 3-18 months |
| Microloan | Startups, small needs | 8% - 22% | Up to 7 years |
| Term | What It Means | Why It Matters |
|---|---|---|
| Interest Rate | Cost of borrowing the principal | Base cost of the loan |
| APR | Annual Percentage Rate including fees | True total cost including origination fees, closing costs |
| Factor Rate | Common in MCAs (e.g., 1.2x) | Multiply by loan amount for total repayment |
| Effective APR | Actual annual cost with compounding | Better for comparing short-term loans |
Example: $50,000 loan at 10% interest with 3% origination fee
Each payment is split between principal and interest. Early in the loan, most of the payment goes to interest.
Year 1 of $100,000 / 8% / 5-year loan:
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $2,027.64 | $1,360.97 | $666.67 | $98,639.03 |
| 6 | $2,027.64 | $1,396.23 | $631.41 | $91,938.27 |
| 12 | $2,027.64 | $1,438.03 | $589.61 | $82,658.11 |
| 24 | $2,027.64 | $1,524.61 | $503.03 | $63,643.71 |
| 36 | $2,027.64 | $1,616.60 | $411.04 | $43,417.93 |
| 48 | $2,027.64 | $1,714.22 | $313.42 | $22,059.15 |
| 60 | $2,027.64 | $2,014.21 | $13.43 | $0.00 |
Key insight: In year 1, you pay $7,936 in interest. In year 5, you pay only $1,722 in interest.
Typically 10-30% of annual revenue for term loans. SBA loans can go up to $5 million. New businesses may qualify for less.
Generally yes. Interest paid on business loans is usually a deductible business expense. Consult a tax professional for your specific situation.