Business Loan Calculator
Calculate monthly payments, total interest, and amortization for business loans and commercial financing
Total amount you want to borrow
Yearly interest rate (APR)
How long to repay the loan
To calculate debt service coverage ratio
About This Calculator
The Business Loan Calculator helps entrepreneurs and business owners understand the true cost of commercial financing before applying. Whether you're seeking an SBA loan, equipment financing, or a working capital line, knowing your monthly payments and total costs is essential. Business loans are a powerful tool for growth - funding equipment purchases, inventory, hiring, marketing, or expansion. But they're also a significant financial commitment that affects your cash flow for years. This calculator shows you exactly what to expect: monthly payments, total interest paid, and how the loan compares to your revenue. Use it to compare loan offers, plan your budget, and ensure the financing makes sense for your business.
How to Use
- 1Enter the loan amount you need
- 2Input the annual interest rate (APR) offered
- 3Select the loan term in years
- 4Optionally enter monthly revenue to see payment-to-revenue ratio
- 5Review monthly payment and total cost of the loan
Formula
M = P × [r(1+r)^n] / [(1+r)^n - 1]This is the standard amortization formula used for fixed-rate business loans. It calculates equal monthly payments that cover both principal and interest over the loan term.
FAQ
Business loan rates vary widely: SBA loans 6-13%, traditional bank loans 5-10%, online lenders 7-30%, equipment financing 6-16%. Rates depend on credit score, revenue, time in business, and collateral.
Lenders typically want DSCR of 1.25 or higher, meaning your cash flow is 25% more than debt payments. A ratio below 1.0 means you can't cover loan payments from operations.
Most lenders look at annual revenue, profitability, credit score, and time in business. As a rule of thumb, you might qualify for 10-30% of annual revenue, but this varies by lender type.
Shorter terms have higher monthly payments but less total interest. Longer terms are easier on cash flow but cost more overall. Match the loan term to the asset's useful life when possible.
Typically: business/personal tax returns, bank statements, financial statements, business plan, proof of ownership, and industry-specific documents. Requirements vary by lender type.