Business Loan Calculator — Monthly Payments, Interest & Amortization
Enter your loan details to see monthly payments, total interest, and the true cost of borrowing.
APR (Annual Percentage Rate)
One-time fee charged at loan closing
Loan Summary
| # | Payment | Principal | Interest | Balance |
|---|
Understanding Business Loans
Monthly Payment is your fixed payment amount, calculated using the loan amount, interest rate, and term.
Total Interest is how much you'll pay beyond the original loan amount over the life of the loan.
Origination Fee is a one-time charge (usually 1-5%) taken from your loan proceeds. A $50,000 loan with a 2% fee means you receive $49,000.
Typical Business Loan Rates (2026)
💡 Loan Shopping Tip
Always compare the total cost of loan, not just monthly payments. A lower rate with high fees can cost more than a higher rate with no fees.
When to Use This Calculator
Before Applying for a Loan
Know your monthly payment before you sit down with a banker. Enter the rate and term you expect to be offered and see if the payment fits your cash flow before committing.
Comparing Multiple Lenders
Different lenders quote different APRs, terms, and fees. Run each offer through the calculator and compare total cost of loan — not just monthly payment — to find the true cheapest option.
Equipment Financing Decisions
When considering equipment financing, compare the loan payment against the revenue or cost savings the equipment will generate. Use the ROI Calculator alongside this to build a complete picture.
Industry Benchmarks
Typical business loan terms by loan type (2026 data, rates vary by creditworthiness).
| Loan Type | Rate Range | Typical Term | Max Amount |
|---|---|---|---|
| SBA 7(a) | Prime + 2.25–4.75% | 10–25 yr | $5M |
| SBA Microloan | 8–13% | Up to 6 yr | $50K |
| Bank Term Loan | 6–13% | 3–10 yr | $1M+ |
| Equipment Financing | 4–30% | 2–7 yr | $5M |
| Online Business Lender | 9–99% | 3 mo–5 yr | $500K |
Common Mistakes
Comparing monthly payments, not total cost
A lower monthly payment often means a longer term and dramatically higher total interest paid. Always compare the total cost of loan (principal + interest + fees) across options.
Ignoring origination fees
A 2% origination fee on a $100K loan means you receive $98K but owe $100K. On short-term loans, fees can add more to your effective cost than the stated interest rate.
Taking more than you need
Every extra dollar borrowed costs interest. Borrow the minimum amount needed plus a small buffer. You can always take a second draw or line of credit if needed.
Not checking prepayment penalties
Some loans charge a fee for paying off early. If you plan to refinance or pay down the loan quickly, this can eliminate the benefit of a lower rate.
Data Sources
Current business loan rate benchmarks from the Federal Reserve's Selected Interest Rates statistical release.
SBA 7(a) and microloan terms sourced from SBA.gov official program documentation.
Average commercial and industrial loan rates from FDIC and Federal Financial Institutions Examination Council reports.
Frequently Asked Questions
What is a good interest rate for a small business loan?
Interest rates vary widely by loan type and borrower profile. SBA 7(a) loans typically range from 10-13% APR. Bank term loans average 6-13%. Online lenders charge 15-50%+ for faster approval. Your credit score, business revenue, and time in business are the primary factors lenders use to set your rate.
How is a business loan monthly payment calculated?
Monthly payment = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate (annual rate / 12), and n is the total number of monthly payments. This formula assumes a fixed-rate amortizing loan where each payment covers both interest and principal.
What is an origination fee and how does it affect my loan cost?
An origination fee is a one-time charge by the lender to process your loan, typically 0.5-5% of the loan amount. It is usually deducted from the loan proceeds upfront, meaning you receive less than the face value of the loan but pay interest on the full amount.
What is an amortization schedule?
An amortization schedule is a table showing each monthly payment broken down into principal and interest portions. In early months, most of your payment goes toward interest. As you pay down the balance, more goes toward principal. The schedule lets you see exactly how much you owe at any point in time.
Is it better to get a shorter or longer loan term?
Shorter terms mean higher monthly payments but significantly less total interest — you own the asset faster. Longer terms lower monthly payments and improve cash flow, but you pay much more in total interest. A good rule of thumb: match the loan term to the useful life of the asset. Use the PlainTaxData to understand how loan interest deductions affect your tax picture.
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