Free business loan calculator
Enter the loan amount, interest rate, and term — this business loan calculator shows your monthly payment and total interest for a small-business term loan, updated live, as you type.
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Fixed-rate amortized loan. Does not include fees, insurance, or taxes. Rates and terms vary by lender.
Results are estimates. Consult a professional.
How the business loan calculator works
Business term loans amortize exactly like personal loans — each monthly payment covers accrued interest first, then reduces the outstanding principal. The calculator uses the standard amortization formula to show your monthly payment, total amount repaid, and total interest cost. Most SBA 7(a) loans and conventional business term loans are fixed-rate and fully amortizing, meaning the balance reaches zero on the final payment with no balloon.
SBA 7(a) rates are tied to the prime rate plus a lender spread (typically 2.25–4.75%), adjusted for loan size and term. For loans above $50,000 with terms over seven years, the maximum spread is 2.75% over prime. Conventional bank rates for creditworthy businesses typically run 6–13% APR depending on collateral, cash flow coverage, and years in business.
U.S. Small Business Administration — 7(a) loan program terms, rates, and use-of-proceeds rules.Worked example: $100,000 working capital loan at 8% over 5 years
A regional HVAC contractor takes out a $100,000 SBA 7(a) working capital loan at 8% APR over 5 years (60 months) to purchase equipment and fund seasonal payroll. What is the monthly payment, and what does the loan cost in total?
Monthly payments by loan amount, rate, and term
All figures assume fixed-rate, fully amortizing loans with no origination fees or prepayment penalties. Payments are principal and interest only — lenders may require collateral, SBA guarantee fees (0.25–3.75% of guaranteed portion), or other upfront costs that add to the total loan expense.
| APR | Term | $25k | $50k | $100k | $250k | $500k |
|---|---|---|---|---|---|---|
| 7% | 3 years | $772 | $1,544 | $3,088 | $7,720 | $15,441 |
| 7% | 5 years | $495 | $990 | $1,980 | $4,951 | $9,902 |
| 7% | 10 years | $290 | $581 | $1,161 | $2,903 | $5,806 |
| 9% | 3 years | $795 | $1,590 | $3,180 | $7,950 | $15,900 |
| 9% | 5 years | $519 | $1,038 | $2,076 | $5,190 | $10,381 |
| 9% | 10 years | $317 | $633 | $1,267 | $3,167 | $6,334 |
| 11% | 3 years | $819 | $1,638 | $3,276 | $8,189 | $16,378 |
| 11% | 5 years | $544 | $1,088 | $2,175 | $5,439 | $10,877 |
| 11% | 10 years | $344 | $688 | $1,376 | $3,440 | $6,880 |
Source: Calculator-s.cloud amortization model; SBA 7(a) rate benchmarks.
Tips for getting a business loan
Lenders evaluate business loans on the five Cs: capacity (cash flow coverage), capital (owner equity), collateral, conditions (industry and economic environment), and character (credit history). Strengthening your position on any of these factors can improve rate offers and approval odds.
- Know your debt service coverage ratio (DSCR) before applying — Most lenders require DSCR ≥ 1.25, meaning your annual net operating income must be at least 1.25× your total annual loan payments. Calculate this before approaching any lender; if you're below 1.25×, address the gap first.
- Choose the right loan term for the asset — Match the loan term to the useful life of what you're financing. Equipment with a 7-year life shouldn't be financed over 10 years. SBA guidelines align: 10 years max for working capital and equipment, 25 years for real estate.
- Compare total interest cost, not just monthly payment — A longer term always has a lower monthly payment but higher total interest. A $100k loan at 8% over 10 years costs $45,600 in interest versus $21,680 over 5 years. Know the true cost.
- Factor in SBA guarantee fees — SBA 7(a) loans carry a guarantee fee of 0.25–3.75% of the guaranteed loan portion (typically 75–85% of the loan amount). For a $250k loan, the upfront fee can reach $5,000–$7,000. Add this to your total cost comparison.
- Ask about prepayment options — Most SBA 7(a) loans with terms over 15 years have a prepayment penalty for the first three years (5%/3%/1%). Shorter-term conventional loans typically have no prepayment penalty. Factor this in if you plan to pay down the loan early.
Accuracy and limitations
This calculator models fixed-rate, fully amortizing term loans. It does not account for variable-rate loans (SBA loans above a certain threshold use floating prime-based rates), origination fees rolled into principal, balloon payment structures common in commercial real estate, interest-only periods sometimes offered in the first 12–24 months, or SBA guarantee fees. Actual loan costs depend on lender-specific pricing and your creditworthiness.
Not tax or financial advice. Business loan interest is generally tax-deductible as a business expense, but specific tax treatment depends on loan purpose, loan structure, and your tax situation. Consult a licensed CPA or financial advisor before taking on significant business debt. Always read the full loan agreement, including any covenants, before signing.
Business loan terms defined
About this business loan calculator
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