Business Loan Calculator

How Much Will Your Business Loan Cost?

Business financing is more complex than personal lending — rates range from 6% (SBA loans with strong credit) to 50%+ (merchant cash advances), terms span 6 months to 25 years, and structures include fixed payments, variable rates, lines of credit, and revenue-based repayment. Our calculator estimates monthly payments, total interest, and total cost for the most common business loan types.

Enter your loan amount, interest rate, loan term, and loan type. The calculator shows your monthly payment, total interest paid, total repayment amount, and a comparison of how different terms and rates affect total cost.

Quick examples: A $100,000 SBA 7(a) loan at 7.5% for 10 years: $1,187/month, $42,476 total interest. A $50,000 term loan at 12% for 3 years: $1,661/month, $9,803 total interest. A $250,000 commercial real estate loan at 7% for 25 years: $1,767/month, $280,093 total interest.

Types of Business Loans

SBA 7(a) loans are the most popular government-backed business loan. Maximum amount: $5 million. Rates: prime + 1.5–2.75% (approximately 7–10% in 2026). Terms: up to 10 years for working capital, 25 years for real estate. Down payment: typically 10–20%. The SBA doesn’t lend directly — it guarantees 75–85% of the loan through participating lenders, reducing the lender’s risk and enabling lower rates and longer terms than conventional business loans. Processing time: 30–90 days. Requirements: 2+ years in business, 680+ credit score (preferred), strong cash flow documentation.

SBA 504 loans are specifically for purchasing fixed assets (real estate, heavy equipment). Two-part structure: a conventional lender provides 50%, a Certified Development Company (CDC) provides 40% (backed by the SBA), and the borrower provides 10% down. Rates on the CDC portion are fixed and often below market. Maximum CDC portion: $5.5 million. Terms: 10 or 20 years. These are the best rates available for purchasing commercial property.

Conventional bank term loans are straightforward fixed-amount, fixed-term loans. Amounts: $25,000–$500,000+ (larger for established businesses). Rates: 6–13% depending on creditworthiness and collateral. Terms: 1–10 years. Monthly fixed payments. Faster approval than SBA (1–4 weeks) but typically higher rates and shorter terms.

Business lines of credit provide flexible access to funds up to an approved limit — draw what you need, pay interest only on the drawn amount. Credit limits: $10,000–$500,000+. Rates: 7–25% on drawn balances. Best for managing cash flow fluctuations, covering seasonal expenses, and handling unexpected opportunities or costs. Revolving — as you repay, the credit becomes available again.

Equipment financing uses the equipment itself as collateral, enabling favorable rates. Loan amount: up to 100% of equipment value. Rates: 5–15%. Terms: match the equipment’s useful life (3–7 years typically). Down payment: 0–20%. At the end of the term, you own the equipment outright.

Merchant cash advances (MCAs) provide a lump sum in exchange for a percentage of future credit card sales. Factor rates: 1.1–1.5 (effectively 20–50%+ APR). Repayment: daily or weekly automatic deductions from sales. No fixed term — repayment speed depends on sales volume. MCAs are the most expensive business financing option and should be a last resort. They’re fast (funding in 1–3 days) but the cost is extreme.

How Business Loan Payments Are Calculated

Standard business term loans use the same amortization formula as personal loans: M = P × [r(1+r)^n] / [(1+r)^n - 1] where M is the monthly payment, P is the principal, r is the monthly interest rate, and n is the total number of payments.

Interest-only periods are common in business lending. Some loans allow 6–24 months of interest-only payments before principal repayment begins — reducing initial cash flow burden while the business ramps up or completes a project. A $200,000 loan at 8% with a 12-month interest-only period: first year payments are $1,333/month (interest only), then payments increase to approximately $2,430/month for the remaining 9 years of a 10-year term.

Variable rate considerations: Many business loans are tied to the prime rate (currently approximately 7.5% in 2026) plus a spread. If prime rises by 1%, your rate — and payment — increases correspondingly. On a $200,000 balance, a 1% rate increase adds approximately $167/month. Consider whether your business cash flow can absorb rate increases when choosing between fixed and variable.

What Lenders Evaluate

Revenue and cash flow are the primary qualifiers. Lenders want to see that your monthly debt payments (including the new loan) don’t exceed 25–35% of monthly revenue. They’ll review 2–3 years of tax returns, 3–6 months of bank statements, and profit and loss statements.

Debt Service Coverage Ratio (DSCR): Net operating income ÷ total annual debt service. Lenders typically require a DSCR of 1.25 or higher — meaning your business generates at least 25% more income than needed to cover all debt payments. A DSCR below 1.0 means the business can’t cover its debts from operations.

Personal credit score matters even for business loans — most small business lenders check the owner’s personal credit. 700+: best rates and terms. 650–699: most options available at moderate rates. Below 650: limited to alternative lenders, higher rates, and shorter terms.

Time in business: Most traditional lenders require 2+ years of operating history. Startups are generally limited to SBA microloans ($50,000 max), personal loans, or alternative online lenders at higher rates.

Collateral: Secured loans (backed by real estate, equipment, inventory, or accounts receivable) qualify for lower rates than unsecured loans. SBA loans require collateral for amounts over $25,000 and a personal guarantee from all owners with 20%+ stake.