Business Loan Calculator
Enter your loan amount, annual interest rate, repayment term and any origination or other fees to instantly see your monthly payment, total interest, total cost and the true Annual Percentage Rate (APR) that includes all fees. Scroll down for a full month-by-month amortization schedule and a chart showing how your balance falls over time.
How the business loan calculator works
Enter your loan amount, annual interest rate, repayment term (in years and extra months) and any upfront fees. The calculator uses the standard annuity formula to find your fixed monthly payment: P multiplied by r(1+r)^n divided by [(1+r)^n minus 1], where P is the principal, r is the monthly interest rate and n is the number of monthly payments. It then builds a full amortization schedule showing exactly how each payment splits between principal and interest, and solves for the true APR by finding the rate at which the present value of all payments equals the net loan proceeds you actually receive after fees are deducted.
Understanding the true APR vs. the stated rate
The stated interest rate is what the lender advertises. The true APR (Annual Percentage Rate) reflects the full cost of borrowing by also accounting for upfront fees such as origination and documentation charges. Because those fees reduce the net cash you receive while your monthly payment stays the same, the APR is almost always higher than the stated rate. For example, a 7% loan with a 2% origination fee on a 5-year term has an effective APR closer to 7.8%. Federal law (under the Truth in Lending Act) requires lenders to disclose the APR, so it is the number to use when comparing offers from multiple lenders.
How compounding frequency affects your cost
Most business term loans compound monthly, meaning interest is calculated on the outstanding balance once per month. Some online lenders use daily compounding, which increases the effective rate slightly. For example, a 10% annually stated rate compounds to 10.516% annually when compounded daily versus 10.471% monthly. The difference seems small but grows with loan size and term. Always confirm the compounding frequency with your lender and use this calculator's compounding selector to match their terms exactly.
Reading the amortization schedule
Each row in the amortization schedule shows one monthly payment broken into two parts: the interest portion (balance at the start of that month multiplied by the monthly rate) and the principal portion (the remainder of the payment). Early in the loan, most of each payment goes toward interest. As the balance falls, the interest portion shrinks and the principal portion grows. This is why paying even small extra amounts in the early months saves disproportionately large amounts of total interest over the life of the loan. The cumulative columns show the running totals, making it easy to see exactly how much you will have paid at any point.
Typical business loan rates by loan type (2025)
| Loan type | Typical APR range | Common term | Collateral required? |
|---|---|---|---|
| SBA 7(a) loan | 10-15% | 7-25 years | Often |
| SBA 504 loan | 6-9% | 10-25 years | Yes (fixed assets) |
| Bank term loan | 6-13% | 1-10 years | Often |
| Online term loan | 7-30% | 1-5 years | Varies |
| Business line of credit | 8-24% | Revolving | Varies |
| Equipment financing | 4-20% | 2-7 years | Yes (equipment) |
| Invoice financing | 15-35% eff. | Per invoice | Yes (receivables) |
| Merchant cash advance | 40-350% eff. | 3-18 months | No |
Rates vary by lender, borrower creditworthiness, and market conditions. Use as a benchmarking guide only.
Frequently asked questions
What is a typical interest rate for a business loan?
Rates depend on loan type, lender and your creditworthiness. SBA 504 loans often carry 6-9% APR, bank term loans 6-13%, and online lenders 7-30%. Merchant cash advances can carry effective rates well above 40%. The Federal Reserve's prime rate moves affect variable-rate products. Always compare APRs, not just stated rates, so that fees are included in the comparison.
What fees should I expect on a business loan?
Common fees include an origination fee (0.5-3% of the loan amount), documentation or packaging fees (flat amounts of a few hundred dollars), SBA guarantee fees (0.5-3.75% for SBA loans), prepayment penalties, and late-payment fees. This calculator lets you enter both a percentage-based origination fee and a flat "other fees" figure so the true APR reflects all upfront costs.
How does loan term length affect my monthly payment?
A longer term spreads the payments over more months, making each payment lower. However, more time means more interest accumulates, so the total cost of the loan is higher. A shorter term raises the monthly payment but significantly cuts total interest. Use this calculator to compare a 3-year versus a 5-year term on the same principal and rate to see the trade-off in concrete dollars.
What is the difference between APR and interest rate?
The interest rate is the annual cost of borrowing the principal, excluding fees. The APR is the annual cost including fees, expressed as a percentage, so it is always equal to or greater than the interest rate. APR standardizes the cost of different loan offers so you can compare them on a level footing. Federal law requires lenders to disclose APR, but some lenders, especially online or MCA providers, use other metrics like factor rates that obscure the true cost.
Can I use this calculator for SBA loans?
Yes. Enter the loan amount, the SBA-fixed or prime-based rate (confirm with your lender), the SBA guarantee fee plus packaging fees in the upfront fields, and the appropriate term (7 years for working capital, up to 25 years for real estate). The calculator will compute your monthly payment and true APR. Note that SBA 7(a) loans may have variable rates tied to prime, so the schedule is an estimate if your rate can change over time.