Business loan calculator: your payment and what it costs
Enter a loan amount, rate and term to see the payment, the total interest and when the loan is paid off. Or start from the payment you can afford and see how much it could borrow. The math runs in your browser, so nothing you type is sent to us.
What each number means and where to find it
Most of these are on the term sheet or the loan agreement. The fees are often clearest on the closing statement.
Loan amount
The amount in the loan agreement, before any fees come out. If fees are deducted, less than this reaches your account, yet you repay all of it.
Interest rate
The yearly rate the agreement charges on the balance. It is often called the note rate. Do not enter an APR here, since an APR already counts the fees.
Term
How long you have to repay, usually stated in months. A loan that is due before it is fully paid down ends with a balloon payment, which this calculator does not model.
Payment frequency
How often the payment comes out of your account. Bank and SBA loans are usually monthly. Some online lenders collect every week or every business day.
Fees at closing
Origination, packaging, guarantee and closing fees. Look for them on the closing statement or the disclosure, and enter them as a percentage or in dollars.
Extra payments
Any amount you plan to pay on top of the scheduled payment. It goes to principal, as long as the agreement allows prepayment.
How a business loan payment is worked out
A standard business loan is amortized: every payment is the same, and each one covers the interest due on the balance and pays down part of the principal. The payment is set so the last one brings the balance to exactly zero.
The rate per payment, i, is the yearly rate divided by the number of payments in a year. The payment is then P × i ÷ (1 − (1 + i)−n), where P is the loan amount and n is the number of payments. Each period, the interest is the balance times i, and the rest of the payment comes off the balance.
Take $100,000 at 10% over five years, paid monthly. The rate per payment is 0.10 ÷ 12, and there are 60 payments. The payment comes to $2,124.70, the 60 payments add up to $127,482, and $27,482 of that is interest.
- Rate per payment (i)
- Yearly rate ÷ payments a year (12, 26, 52 or 252)
- Number of payments (n)
- Term in years × payments a year
- Payment
- P × i ÷ (1 − (1 + i)^−n)
- Interest in a payment
- Balance before the payment × i
- Total interest
- Payment × n − P
| Rate | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| 6% | $8,607 a month $3,280 interest | $3,042 a month $9,519 interest | $1,933 a month $15,997 interest | $1,110 a month $33,225 interest |
| 10% | $8,792 a month $5,499 interest | $3,227 a month $16,162 interest | $2,125 a month $27,482 interest | $1,322 a month $58,581 interest |
| 15% | $9,026 a month $8,310 interest | $3,467 a month $24,795 interest | $2,379 a month $42,740 interest | $1,613 a month $93,602 interest |
| 20% | $9,263 a month $11,161 interest | $3,716 a month $33,789 interest | $2,649 a month $58,963 interest | $1,933 a month $131,907 interest |
| 30% | $9,749 a month $16,985 interest | $4,245 a month $52,826 interest | $3,235 a month $94,120 interest | $2,636 a month $216,342 interest |
Why weekly and daily payment schedules cost differently
At the same yearly rate, paying more often pays the balance down sooner, so a little less interest builds up. On $100,000 at 10% over three years, monthly payments cost $16,162 in interest. Payments every business day cost $15,769, which is $393 less.
The saving is small next to what the schedule does to your cash flow. A daily debit of $153.13 leaves your account 756 times instead of 36, including in the weeks when deposits are light. If an offer with daily or weekly payments quotes a factor rate instead of an interest rate, the MCA calculator is the one to use.
| Payments | Each payment | How many | Total interest |
|---|---|---|---|
| Monthly | $3,226.72 a month | 36 | $16,162 |
| Every two weeks | $1,486.41 a two weeks | 78 | $15,940 |
| Weekly | $742.59 a week | 156 | $15,844 |
| Every business day | $153.13 a business day | 756 | $15,769 |
The rate per payment is 10% divided by the payments in a year: 12, 26, 52, 252.
What fees do to the APR
A fee taken at closing means you repay the full loan but receive less. The APR measures the payments against the money that actually reached you. The calculator finds it by the actuarial method in Appendix J of Regulation Z: the rate per period at which the payments are worth exactly the amount received, times the payments in a year.
A 3% fee on $100,000 at 10% over five years lifts the APR to about 11.32%. The same fee on a one-year loan lifts it to about 15.80%, because the $3,000 is spread over 12 payments instead of 60. The shorter the loan, the more a fee matters.
| Fee at closing | 1 year | 3 years | 5 years |
|---|---|---|---|
| None | 10.00% | 10.00% | 10.00% |
| 2% ($2,000) | 13.84% | 11.39% | 10.88% |
| 3% ($3,000) | 15.80% | 12.11% | 11.32% |
| 5% ($5,000) | 19.81% | 13.56% | 12.24% |
Five checks before you sign
Ask about prepayment penalties
Some loans charge a fee if you pay early, or collect the remaining interest anyway. Ask whether yours does, and get the terms in writing before you plan extra payments.
Get every fee in dollars
A fee quoted as a percentage is easy to skim past. On a $100,000 loan, a 3% origination fee is $3,000 that you repay with interest and never receive.
Find out if the rate is fixed or variable
A variable rate moves with an index such as the prime rate, so the payment this calculator shows holds only until the rate changes. Ask how often it can reset and whether there is a cap.
Match the payments to your deposits
A weekly or daily debit takes money out between your busiest days. Check that your account can carry it in a slow week, not only in an average month.
Compare the APR, not only the rate
Two loans at the same rate can cost different amounts once fees are counted. Put the APR with fees side by side for every offer you hold.
Questions about business loan payments
Business loan calculator
Divide the yearly rate by the number of payments a year to get the rate per payment, i. Then the payment is P × i ÷ (1 − (1 + i)^−n), where P is the loan amount and n is the number of payments. For $100,000 at 10% over five years of monthly payments, i is 0.10 ÷ 12 and n is 60, which gives a payment of $2,124.70.
It depends on the rate and the term. As examples, not typical rates: at 8% over three years the payment is about $1,567 a month, at 12% over five years it is about $1,112, and at 25% over two years it is about $2,669. Enter the rate and term you were offered to see your own figure.
Start from the payment your cash flow can carry after your other bills, and choose Find how much I can borrow. A payment of $2,000 a month at 10% over five years repays a loan of about $94,131. Lenders make their own assessment of your cash flow and credit, so treat this as a starting point.
A little, at the same quoted rate, because the balance falls sooner. On $100,000 at 10% over three years, monthly payments come to $16,162 of interest and weekly payments to $15,844, a difference of $318. The bigger question is whether your account can carry a debit every week.
It is a table of every payment over the life of the loan, showing how much goes to interest, how much goes to principal, and what is still owed afterward. Early payments are mostly interest, because the balance is at its highest. The calculator shows yours month by month or year by year.
The interest rate is charged on the balance. The APR also counts fees, measured against the money that reaches you. A $100,000 loan at 10% over five years with a 3% fee taken at closing has an APR of about 11.32%.
No. The calculator runs in your browser and sends nothing to us. The numbers are kept in the page address only so you can bookmark the page or send it to someone.
Read more about business loans
- SBA and bank loansLonger terms with monthly payments, and what lenders ask to see.
- Equipment financingLoans secured by the equipment they buy, with terms set by its useful life.
- Merchant cash advance vs loanHow the two differ in cost, speed, paperwork and what happens when sales slow.
- MCA calculatorFor offers quoted with a factor rate: the payback, the cost and an estimated APR.
