Free Business Tool

Business Loan Payment Calculator

See your monthly payment, total interest, and what a business term loan will really cost you.

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What Is the Business Loan Payment Calculator?

Plug in a loan amount, interest rate, and term to see your exact monthly payment, total interest, and total cost. The interest-to-principal ratio shows how much of your money goes to the lender versus actually paying down what you owe. Term loans are the simplest form of business financing: borrow a lump sum, pay it back in equal monthly installments, fixed rate. No surprises. Use this to figure out whether the payment fits your cash flow, compare offers from different lenders, and see how changing the rate or term shifts the total cost.

How to Use This Calculator

1

Enter the Loan Amount

The total amount you want to borrow -- the principal before interest or fees get added on.

2

Set the Interest Rate

The annual rate (APR) the lender quoted you. If they gave you a monthly rate, multiply by 12.

3

Choose the Loan Term

How long you want to take paying it back. Shorter = higher payments but less interest. Longer = easier monthly bills but more total cost.

4

Review All Outputs

Check the monthly payment, total interest, and interest-to-principal ratio. If more than 30% of your payments go to interest, try a shorter term or shop for a better rate.

Key Concepts

Amortization

Every payment splits between interest and principal. Early on, most of your payment is interest. As the balance shrinks, more goes to paying down what you actually owe.

APR vs. Factor Rate

APR is the annual cost of a traditional loan. Factor rates are an MCA thing. Never compare them directly without converting the factor rate to APR first -- they measure completely different things.

Origination Fees

Many lenders take 1-5% right off the top as origination fees. A $100K loan with a 3% fee means you get $97K in your account but repay the full $100K plus interest.

Prepayment Penalties

Some lenders hit you with 1-5% of the remaining balance if you pay off early. If there's any chance you'll prepay, negotiate this out before you sign.

Fixed vs. Variable Rate

Fixed rates don't move for the life of the loan. Variable rates track a benchmark like Prime or SOFR -- they start lower but can climb during your repayment period.

Expert Insights

For loans under $250K, you want the interest-to-principal ratio under 25%. If it's above 35%, the rate is too high, the term is too long, or both. Go back to the lender.

Check the monthly payment against your net income. If it's more than 15% of net, your buffer is razor-thin and one slow month could mean a missed payment.

Get quotes from at least three lenders. Banks, credit unions, and online lenders can be 3-5 points apart on rate for the same borrower. On a $100K loan, that gap is $8,000-$15,000. Don't leave that money on the table.

Frequently Asked Questions

Right now, SBA loans run 6-10%, bank term loans 7-12%, and online lenders 9-30%. Where you land depends on your credit score, time in business, annual revenue, and how much you're borrowing.
Longer terms cut your monthly bill but pile on interest. A $100K loan at 10% costs $11,616 in interest over 24 months versus $27,480 over 60 months. Your payment drops from $4,651 to $2,125 -- but you pay $16,000 more total.
If you can handle the bigger payment, go shorter and save on interest. But if that payment would crush you in a slow month, the longer term gives you breathing room. Cash flow safety matters more than saving on interest.
Origination fees (1-5%), documentation fees ($100-$500), UCC filing fees ($50-$200), late payment fees, and prepayment penalties. Get the full fee schedule in writing before you compare anything.
Yes. If your credit or revenue improves, you can often get a lower rate. Just check for prepayment penalties on the current loan and origination fees on the new one -- those costs can eat your savings.

This calculator provides estimates for educational purposes only. Actual results depend on your specific business financials, lender terms, and market conditions. Consult a qualified financial advisor before making major business financing decisions.

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