Business Loan Calculator

How this business loan calculator works

A business term loan is an installment loan: you borrow a fixed amount and repay it in equal payments over a set term. This calculator applies the standard amortization formula to your loan amount, interest rate and term to find that fixed payment, your total interest and the total repayment. Because business loans usually carry an origination fee — and often documentation and other charges — it also computes the real APR, which folds those fees into a single yearly rate so you can compare offers fairly.

Each payment covers interest on the outstanding balance first, with the rest reducing the principal. Early on more goes to interest; later, more goes to principal. The amortization table shows this split period by period until the balance reaches zero.

Interest rate vs real APR

The interest rate is the cost of borrowing the principal alone. The real APR is broader: it also counts the upfront fees, expressed as a yearly rate. Two loans can quote the same interest rate yet have very different APRs once an origination fee is included, which is why the fee-inclusive APR is the more honest figure for comparing business financing — and this tool shows both.

Business loan fees to watch

• Origination fee — a one-time charge for processing and funding, commonly 1% to 8% of the amount and usually deducted from what you receive.
• Documentation fee — a flat charge for paperwork, legal and administrative work.
• Application fee — charged upfront by some lenders to process the request, on top of origination.
• Prepayment penalty — a charge on some loans for repaying early; worth checking if you might pay ahead of schedule.
• Other fees — a catch-all for underwriting, packaging, servicing, late-payment or wire charges some lenders add.

Common types of business loans

The most common financing is a term loan — a lump sum repaid over a fixed period, which is what this calculator models. Businesses also use lines of credit, equipment financing, SBA loans (government-backed, lower-rate but slower to approve), commercial real estate and commercial mortgage loans, commercial property and land loans, agricultural and farm-credit loans, working-capital loans, and short-term options such as invoice or merchant-cash financing. Any of these that repays in fixed installments works here — enter its amount, rate, term and fees above to see the true cost.

SBA loans at a glance

SBA loans are backed by the U.S. Small Business Administration but issued by regular lenders, which brings lower rates and longer terms in exchange for more paperwork. The four main programs:

• 7(a) — the flagship program, up to $5 million for almost any purpose: working capital, buying a business, equipment or property.
• Microloan — up to $50,000 through non-profit lenders, for working capital, inventory, supplies or equipment.
• 504 / CDC — fixed-rate financing up to $5.5 million for major assets such as real estate (up to 25 years) or equipment (up to 10 years).
• Disaster — up to $2 million to repair or replace business assets after a declared disaster, with terms up to 30 years.

Since July 2026 the 7(a) and 504 limits are counted separately, so eligible borrowers can combine them for up to $10 million in total. All of these repay in fixed installments — enter the amount, rate, term and fees above to price one. Borrowing a smaller amount, or as a sole trader? The personal loan calculator may fit better.

Using it as a commercial or SBA loan calculator

A commercial loan, an SBA loan and a commercial real estate or commercial mortgage all repay through the same fixed-installment maths, so this tool also works as a commercial loan calculator, an SBA loan calculator and a commercial property loan calculator. Enter the amount, rate and term for your commercial mortgage, commercial land or working-capital facility, add the origination and any documentation fees, and you get the payment, total cost and the fee-inclusive real APR alongside a full amortization schedule.

Estimates for general information only — not financial advice. Confirm the exact rate, fees and terms with your lender before you borrow.

The business loan payment formula

The fixed payment comes from the standard amortization (annuity) formula:

The real APR is then solved so the present value of all the payments equals the amount you actually receive — the loan minus the fees — and expressed as a yearly rate.

Monthly payment by business loan amount

Roughly what common business loan amounts cost per month at a 7% rate over 10 years, before fees. Enter your own amount, rate and term above for an exact figure.

How to use it & key terms

Enter the loan amount, rate, term and any fees, then press Calculate for the monthly payment, total cost and APR.

Deciding whether the loan actually pays for itself

The real question behind any business loan is not just what the payment will be, but whether the money it frees up will earn more than the loan costs. That comparison is the heart of return on investment. If borrowing funds a project that lifts profit by more than the interest and fees you pay, the loan has created value; if the project returns less than the loan costs, you have borrowed your way to a smaller bottom line. A payment you can afford is not the same as a loan worth taking.

This is the difference between positive and negative leverage. Positive leverage is when the return on what you buy — new equipment, more inventory, an extra location, a marketing push — comfortably exceeds the loan's all-in cost, so each borrowed dollar multiplies. Negative leverage is the reverse: the borrowed money underperforms its cost, and the debt quietly drains the business. The cost side of that comparison is the loan's true APR, fees included, not just the headline rate, which is why looking past the sticker rate matters so much for a borrowing decision.

Timing is the part that catches owners out. A loan payment is due every month from the very first month, but the returns from what you financed often arrive later and less evenly — a renovation takes time to lift sales, new equipment needs a ramp-up, a season has to turn. Even a genuinely profitable investment can strain cash flow in the gap between the first payment and the first payoff, so it is worth mapping when the money goes out against when it is likely to come back in.

Numbers only take the decision so far. Before borrowing, it helps to ask a few plainer questions: how confident is the projected return, what happens to the payments if it lands late or comes in lower, and whether the business could still service the loan through a slow stretch. A conservative estimate that still clears the loan's cost is a far stronger signal than an optimistic one that only works if everything goes right. Enter your amount, rate and term above to see the true cost side of that comparison, then weigh it against the return you can realistically expect the borrowed money to earn.