Business Loan Calculator

A business loan calculator answers two questions: whether the monthly payment fits your cash flow, and what the money actually costs. This one adds the origination or SBA feeto the picture, so you see the net capital that reaches your account and thetotal cost of capital — not just the advertised payment. Nothing you enter leaves your browser.

Reading the five outputs

Using the defaults — $100,000 at 8.5% over 7 years with a 2.5% fee:

The fee is a rate increase in disguise

This is the most important thing on the page. You are quoted 8.5%, you sign for $100,000, and your payments are calculated on $100,000 — but $97,500 is what lands in the bank. Borrowing $97,500 and repaying $1,583.65 a month for seven years is arithmetically the same as a loan atabout 9.30%.

So a 2.5% origination fee on a seven-year term costs roughly 0.80 of a percentage point. That is why comparing quotes on headline rate alone is a mistake: a lender offering 8.9% with no fee is cheaper than one offering 8.5% with 2.5% up front. Run each offer here and compare thetotal cost of capital, which is the only row that captures both.

Note the fee's effect shrinks as the term lengthens, because it is spread over more payments — on a three-year loan the same 2.5% is a much bigger annualised penalty. Short-term borrowing is where fees do the most damage, and it is exactly where fee-heavy lenders concentrate.

Term length: payment against total cost

Stretching from three years to ten cuts the payment by $1,917 a month and adds$35,140 to the cost of the money. Neither end is automatically right. A business with thin margins and a genuine growth use for the cash may be correct to take the long term and the higher total; one buying a depreciating asset out of steady profits usually should not.

Using it to make an actual decision

1. Cash-flow test first. The payment should sit comfortably below your monthly free cash flow, not equal to it. Lenders often size debt to a coverage ratio around 1.25× for exactly this reason.
2. Price every offer the same way. Enter each quote's own rate and fee, then compare total cost of capital rather than rate or payment.
3. Check the term against the asset. Financing beyond an asset's useful life means paying for something you no longer use.
4. Ask what else is deducted at closing. Packaging, legal and filing fees may sit outside the origination fee entirely — add them into the fee percentage to see their real effect.
5. Test a worse case. Re-run at a rate a point or two higher, or a term a year shorter, and check the payment still works.

What is out of scope

This models a fixed-rate, fully amortising term loan and nothing else. It does not handle revolving lines of credit, merchant cash advances, invoice factoring, interest-only periods, balloon payments, seasonal payment schedules, prepayment penalties, or the variable rates common on SBA 7(a) loans tied to prime. It also takes no view on tax: interest on a business loan is generally deductible, which reduces the effective cost, and that is a conversation for your accountant rather than a calculator.

Related calculators

For borrowing in your own name, the personal loan calculatormodels the same fee mechanic on unsecured credit. If premises are part of the plan, thecommercial lease calculator works out effective rent including CAM charges, and the real estate calculator handles buying instead. Vehicles are covered by the auto loan calculator. For invoicing once the money is working, the invoice generator and theVAT calculator are the practical next stops.