Business Loan Calculator: Estimate Your Monthly Payment

Business Loan Calculator

Enter your loan amount, annual interest rate (APR), and repayment term below to see your estimated monthly payment, total interest paid, and total cost of the loan. Adjust the numbers to compare different scenarios side by side.

How to Use This Calculator

Plug in three numbers and the calculator does the rest. But getting the most out of it requires knowing what to enter — and how to interpret what comes back.

Loan amount is straightforward: enter the total amount you plan to borrow. If your lender charges an origination fee that’s deducted from the loan proceeds, enter the full loan amount (not the net amount you’ll receive). A $100,000 loan with a 3% origination fee still requires payments on $100,000.

Annual rate (APR) is where most confusion lives. Use the APR, not just the interest rate — the APR includes origination fees and gives you the true annual cost. If your lender quotes a factor rate instead (common with merchant cash advances), convert it first: multiply the factor rate by the principal, subtract the principal, divide by the principal, multiply by 365, then divide by the term in days.

Term is the repayment period in years. SBA 7(a) loans can stretch to 10–25 years. Online term loans typically run 1–5 years. Lines of credit don’t have a fixed term — this calculator works for fixed installment loans only.

How Business Loan Payments Work

Most business term loans use amortized payments — each monthly payment is the same dollar amount, but the split between principal and interest shifts over time. Early in the loan, most of your payment goes to interest. By the final year, almost all of it goes to principal. That’s why paying extra in the first two years has an outsized impact on total interest saved.

Here’s a concrete example. On a $100,000 loan at 10% APR over 5 years, your monthly payment is $2,125. In month one, $833 goes to interest and $1,292 to principal. By month 48, only $174 goes to interest and $1,951 to principal. Same payment amount, very different allocation. The amortization schedule above shows this shift year by year.

Interest-only loans work differently. You pay only the interest for a set period (usually 6–24 months), then either pay a balloon principal payment or begin amortized payments. The monthly cost is lower initially — on that same $100,000 at 10%, your interest-only payment would be just $833/month versus $2,125. But you’re not reducing the principal at all, so the total cost over the loan’s life is significantly higher.

Typical Rates by Loan Type

Not sure what rate to enter? Here’s what businesses are actually paying across different loan products as of March 2026. Enter these into the calculator to compare your options.

How to Reduce Your Loan Costs

The calculator shows you the math. Here’s how to bend the math in your favor.

Improve your credit score before applying. A jump from 650 to 700 can drop your rate by 3–5 percentage points. On a $100,000 five-year loan, going from 15% to 10% saves you $15,500 in total interest. Pay down credit card balances below 30% utilization, dispute errors on your credit report, and wait 30–60 days before applying.

Offer collateral. Secured loans — backed by equipment, real estate, or accounts receivable — carry lower rates because the lender’s risk is reduced. An unsecured online loan at 25% might be available at 12%–15% secured by equipment.

Choose the shortest term you can afford. Run the calculator at different terms. The payment difference between 3 and 5 years is often manageable, but the interest savings are substantial. Just make sure the monthly payment doesn’t strain your cash flow below a 1.25x debt service coverage ratio.

Compare at least three lenders. Rate spreads between lenders can be 5–10 percentage points for the same borrower profile. Pre-qualifying with multiple lenders takes minutes and uses a soft pull that doesn’t affect your score. Pre-qualify through PrimeRates to see offers from multiple lenders in one application.

Factor Rates vs. APR: Why It Matters

Some lenders — especially those offering merchant cash advances and short-term online loans — quote a factor rate instead of an APR. A factor rate of 1.25 looks like 25%, but it’s actually much more expensive because the interest isn’t reduced as you pay down the principal.

Here’s the math. A $50,000 loan with a 1.25 factor rate means you repay $62,500 total ($50,000 × 1.25). If the term is 12 months, that’s $12,500 in “interest” — but since you’re paying down the balance each month, the effective APR is closer to 45%, not 25%. On a 6-month term, the effective APR jumps to roughly 90%.

To convert a factor rate to an approximate APR for this calculator: take the factor rate, subtract 1, divide by the term in years, then multiply by 2. So a 1.3 factor rate on a 1-year loan ≈ (0.3 / 1) × 2 = 60% APR. It’s not exact, but it’s close enough for comparison shopping. The SBA recommends always requesting the APR from any lender to make apples-to-apples comparisons.

Next Steps

Now that you’ve estimated your costs, here’s how to move forward:

1. Run three scenarios. Use the calculator with your best-case rate, expected rate, and worst-case rate. Make sure your business can comfortably handle the worst-case monthly payment.

2. Check your debt service coverage. Divide your monthly net operating income by the estimated monthly loan payment. If the result is below 1.25, you either need a smaller loan, a longer term, or more revenue before borrowing.

3. Pre-qualify with multiple lenders. You’ve done the math — now see real offers. Pre-qualify through PrimeRates in under two minutes to compare actual rates and terms from lenders in our network. No credit score impact.

4. Gather your documents. Most lenders need 3–6 months of bank statements, recent tax returns, a profit-and-loss statement, and your business license. Having these ready before you apply speeds up approval significantly.

Frequently Asked Questions

How do I calculate my business loan payment?

For a standard amortized loan, the formula is: M = P × [r(1+r)^n] / [(1+r)^n – 1], where P is the principal, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly payments. Or simply use the calculator above — enter your loan amount, rate, and term, and it does the math instantly.

What is a good interest rate on a business loan?

It depends on the loan type. SBA loans range from 6%–13% APR and represent the best rates available. Bank term loans run 7%–15%. Online lenders charge 15%–50%+. A “good” rate is one that’s competitive for your specific loan type and credit profile. Compare offers from multiple lenders to ensure you’re getting the best available rate.

How much can I borrow with a business loan?

SBA 7(a) loans go up to $5 million. Online lenders typically cap at $250,000–$500,000. Most lenders base the amount on a multiple of your monthly revenue — usually 1x to 4x. A business earning $30,000/month might qualify for $30,000–$120,000 depending on the product and lender.

Should I choose a shorter or longer loan term?

Shorter terms cost less in total interest but require higher monthly payments. Use the calculator to compare: a $100,000 loan at 10% costs $27,500 in interest over 5 years, but only $16,300 over 3 years — a savings of $11,200. Choose the shortest term your cash flow can comfortably support.

What fees should I watch for besides interest?

Origination fees (1%–6% of the loan, deducted from proceeds), late payment fees, prepayment penalties (some lenders charge you for paying early), and closing costs. Always ask for the total cost of capital — not just the rate — before signing.

References

1. U.S. Small Business Administration — Loan Programs
2. Consumer Financial Protection Bureau — Business Loan Guide
3. Federal Reserve — Small Business Lending Survey
4. SCORE — How to Calculate Business Loan Payments

Keep Reading

• Best Business Loans: Compare Top Lenders
• SBA Loans: Compare 7(a), 504 & Microloan Programs
• Best Long-Term Business Loans
• Emergency Business Loans: Fast Funding
• Bad Credit Business Loans (500+ Score)

This calculator provides estimates for illustrative purposes only. Actual loan terms, rates, and payments may vary. This is not financial advice. Always review loan agreements carefully before signing. Rates and terms are subject to change. Last updated: March 2026.