About the Business Loan Calculator
This business loan calculator estimates the regular payment on a small business term loan and shows what the loan really costs. Enter the amount you want to borrow, the interest rate, the term and how often you repay. It returns the payment, the total interest, the total you will repay and a year-by-year balance schedule.
Many business lenders — online lenders especially — deduct an origination fee from the money you receive, and some collect payments weekly rather than monthly. Add the fee percentage and choose the payment frequency to see the net amount you actually receive and the effective APR, which folds the fee into the rate so you can compare offers fairly.
Use it when comparing bank term loans, SBA loans and online lender quotes, when planning cash flow for equipment or expansion, or when writing a loan request. The calculation assumes a fixed rate and level, fully amortizing payments; merchant cash advances and factor-rate products are priced differently.
With the default inputs, the payment per period is $2,027.64. Change any value above to recalculate instantly.
How to use the business loan calculator
- 1Enter the amount you plan to borrow.
- 2Enter the annual interest rate from your quote.
- 3Set the term in years and choose monthly, biweekly or weekly payments.
- 4Add any origination fee the lender deducts up front.
- 5Compare the payment, total cost and effective APR across offers.
Formula and method
The payment uses the standard amortizing-loan formula. P is the loan amount, r is the periodic rate (annual rate ÷ payments per year) and n is the total number of payments (years × payments per year). Each payment covers that period’s interest on the remaining balance and the rest reduces principal.
The effective APR treats the origination fee as a cost: it finds the annual rate at which the same payment stream has a present value equal to the cash you actually receive (loan amount − fee). That is the figure to compare between lenders that charge different fees.
- PMT
- Payment each period
- P
- Loan amount (principal)
- r
- Periodic interest rate (annual rate ÷ payments per year)
- n
- Number of payments (term in years × payments per year)
Worked examples
$100,000 over 5 years at 8% with a 2% fee
A $100,000 loan at 8% for 60 months costs $2,027.64 a month and $21,658 in interest. The 2% fee means you receive only $98,000, which raises the effective APR to about 8.86%.
$250,000 expansion loan, 10 years at 10.5%, 3% fee
Over 120 monthly payments of $3,373.37 you repay about $404,805, so interest totals $154,805. Adding the $7,500 fee brings the cost of borrowing to $162,305 and the effective APR to about 11.24%.
Online lender: $50,000, 2 years at 15%, weekly payments
Weekly repayment splits the loan into 104 payments of $557.17. With no fee the effective APR equals the 15% note rate, and total interest is about $7,946.
Frequently asked questions
How is a business loan payment calculated?+
Lenders use the amortization formula: the payment is set so that equal payments cover interest on the declining balance and repay all principal by the end of the term. Divide the annual rate by the number of payments per year to get the periodic rate.
What is a typical interest rate on a small business loan?+
Bank and SBA term loans are usually priced at the prime rate plus a margin, while online lenders often charge considerably more. Your rate depends on time in business, revenue, credit scores and collateral, so always compare the APR, not just the note rate.
Why does an origination fee raise the APR?+
The fee is taken out of the proceeds, so you receive less cash but repay the full loan amount with interest. Spreading that fee over the term makes the effective borrowing rate higher than the stated interest rate.
Are weekly payments cheaper than monthly payments?+
At the same annual rate, weekly payments reduce total interest slightly because principal is repaid sooner, but they take cash out of the business more often. Make sure your cash flow can cover frequent debits.
Is business loan interest tax-deductible?+
In the US, interest on money borrowed for business purposes is generally deductible as a business expense, subject to limits such as the business interest limitation for larger companies. Confirm your situation with a tax professional.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.