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Business loan calculator —
know the true cost before you sign.
Calculate your monthly payment, total interest, and effective APR for any small-business loan, including SBA 7(a), term loans, and equipment financing. Enter your revenue to instantly check your Debt Service Coverage Ratio (DSCR).
Inputs
Loan details
Loan costs & affordability
Revenue is used to calculate your Debt Service Coverage Ratio (DSCR). Leave at 0 to skip.
- Origination fee
- $1,500.00 (1%)
- Effective APR
- 8.93%
- Payoff date
- May 2031
Monthly payment
60-mo · 8.5%
Fixed-rate, fully amortizing — same payment every month until May 2031.
Interest
19%
Balance over time
Remaining loan balance
Amortization
Monthly schedule
| Month | Payment | Principal | Balance |
|---|---|---|---|
| 1 | $3,077.48 | $2,014.98 | $147,985.02 |
| 2 | $3,077.48 | $2,029.25 | $145,955.77 |
| 3 | $3,077.48 | $2,043.63 | $143,912.14 |
| 4 | $3,077.48 | $2,058.10 | $141,854.04 |
| 5 | $3,077.48 | $2,072.68 | $139,781.36 |
| 6 | $3,077.48 | $2,087.36 | $137,694.00 |
| 7 | $3,077.48 | $2,102.15 | $135,591.85 |
| 8 | $3,077.48 | $2,117.04 | $133,474.81 |
| 9 | $3,077.48 | $2,132.03 | $131,342.78 |
| 10 | $3,077.48 | $2,147.14 | $129,195.64 |
| 11 | $3,077.48 | $2,162.34 | $127,033.30 |
| 12 | $3,077.48 | $2,177.66 | $124,855.64 |
| 13 | $3,077.48 | $2,193.09 | $122,662.55 |
| 14 | $3,077.48 | $2,208.62 | $120,453.93 |
| 15 | $3,077.48 | $2,224.26 | $118,229.67 |
| 16 | $3,077.48 | $2,240.02 | $115,989.65 |
| 17 | $3,077.48 | $2,255.89 | $113,733.76 |
| 18 | $3,077.48 | $2,271.87 | $111,461.90 |
| 19 | $3,077.48 | $2,287.96 | $109,173.94 |
| 20 | $3,077.48 | $2,304.16 | $106,869.78 |
| 21 | $3,077.48 | $2,320.49 | $104,549.29 |
| 22 | $3,077.48 | $2,336.92 | $102,212.37 |
| 23 | $3,077.48 | $2,353.48 | $99,858.89 |
| 24 | $3,077.48 | $2,370.15 | $97,488.75 |
| 25 | $3,077.48 | $2,386.93 | $95,101.81 |
| 26 | $3,077.48 | $2,403.84 | $92,697.97 |
| 27 | $3,077.48 | $2,420.87 | $90,277.10 |
| 28 | $3,077.48 | $2,438.02 | $87,839.09 |
| 29 | $3,077.48 | $2,455.29 | $85,383.80 |
| 30 | $3,077.48 | $2,472.68 | $82,911.12 |
| 31 | $3,077.48 | $2,490.19 | $80,420.93 |
| 32 | $3,077.48 | $2,507.83 | $77,913.10 |
| 33 | $3,077.48 | $2,525.60 | $75,387.50 |
| 34 | $3,077.48 | $2,543.48 | $72,844.02 |
| 35 | $3,077.48 | $2,561.50 | $70,282.52 |
| 36 | $3,077.48 | $2,579.65 | $67,702.87 |
| 37 | $3,077.48 | $2,597.92 | $65,104.95 |
| 38 | $3,077.48 | $2,616.32 | $62,488.63 |
| 39 | $3,077.48 | $2,634.85 | $59,853.78 |
| 40 | $3,077.48 | $2,653.52 | $57,200.27 |
| 41 | $3,077.48 | $2,672.31 | $54,527.96 |
| 42 | $3,077.48 | $2,691.24 | $51,836.72 |
| 43 | $3,077.48 | $2,710.30 | $49,126.41 |
| 44 | $3,077.48 | $2,729.50 | $46,396.91 |
| 45 | $3,077.48 | $2,748.83 | $43,648.08 |
| 46 | $3,077.48 | $2,768.31 | $40,879.77 |
| 47 | $3,077.48 | $2,787.91 | $38,091.86 |
| 48 | $3,077.48 | $2,807.66 | $35,284.19 |
| 49 | $3,077.48 | $2,827.55 | $32,456.64 |
| 50 | $3,077.48 | $2,847.58 | $29,609.07 |
| 51 | $3,077.48 | $2,867.75 | $26,741.32 |
| 52 | $3,077.48 | $2,888.06 | $23,853.25 |
| 53 | $3,077.48 | $2,908.52 | $20,944.74 |
| 54 | $3,077.48 | $2,929.12 | $18,015.61 |
| 55 | $3,077.48 | $2,949.87 | $15,065.74 |
| 56 | $3,077.48 | $2,970.76 | $12,094.98 |
| 57 | $3,077.48 | $2,991.81 | $9,103.17 |
| 58 | $3,077.48 | $3,013.00 | $6,090.18 |
| 59 | $3,077.48 | $3,034.34 | $3,055.83 |
| 60 | $3,077.48 | $3,055.83 | $0.00 |
Field guide
How business loan costs are calculated.
Types of small-business loans
Not all business loans work the same way. The most common structures are:
- Term loans: a lump sum repaid over a fixed term (typically 1–10 years) at a stated APR. This calculator models term loans directly. Banks, credit unions, and online lenders all offer term loans.
- SBA 7(a) loans: government-backed loans up to $5 million, with terms up to 25 years for real estate and 10 years for working capital. Rates are usually prime + 2.75–4.75%, and lenders charge an SBA guaranty fee (0.25–3.75% of the guaranteed amount) that functions like an origination fee.
- SBA 504 loans: structured financing for major fixed assets (commercial real estate, heavy equipment). The CDC/SBA portion is fixed-rate for 10 or 25 years; the bank portion is negotiated separately.
- Equipment financing: the equipment itself is collateral. Terms typically match the useful life of the asset (3–7 years). Rates range from 4% to 30% depending on credit and asset type.
- Business lines of credit: revolving credit with interest charged only on the drawn balance. Use our loan calculator for term-loan comparisons; lines of credit require a different model.
How monthly payments are calculated
This calculator uses the standard fully-amortizing payment formula — the same math behind Excel's PMT() function and every bank's loan origination system:
Where P is the loan principal, r is the monthly rate (APR ÷ 12), and n is the term in months. Each payment covers the month's accrued interest first; the remainder reduces principal. Early payments are mostly interest; later payments are mostly principal — the amortization schedule below shows this split every month.
What is an origination fee and why the effective APR matters
An origination fee (also called a processing fee or guaranty fee) is charged upfront as a percentage of the loan amount. Many business lenders charge 1–3%; SBA guaranty fees can reach 3.75% on larger loans. The fee is often deducted from disbursement, so a $150,000 loan with a 2% fee means you receive $147,000 but make payments on $150,000.
This gap between stated APR and true cost is why lenders are required to disclose the effective APR: the actual annualized cost accounting for both interest and fees. This calculator computes the effective APR via Newton–Raphson iteration on the true cash-flow series — the same method used by the CFPB's official APR worksheets.
Debt Service Coverage Ratio (DSCR)
DSCR is the single most important underwriting metric for business loans. It measures how easily your business can cover its debt payments from operating income:
Where annual debt service is simply your monthly payment multiplied by 12. Most SBA lenders require a minimum DSCR of 1.25, meaning your income must be 25% higher than your total debt payments. Banks often require 1.25–1.5; USDA Business Programs may require 1.25. A DSCR below 1.0 means your income doesn't cover debt payments at all, a near-certain denial.
Enter your annual business revenue (or net operating income if you have it) in the optional field above to calculate your DSCR instantly. This tool uses gross revenue as a proxy — for an accurate DSCR in a loan application, use your net operating income from your most recent two years of tax returns.
Tips for securing the best business loan rate
- Build your business credit score. Dun & Bradstreet, Equifax Business, and Experian Business scores all influence pricing. Scores of 80+ on the Paydex scale typically unlock the best bank rates.
- Separate your personal and business finances. A dedicated business checking account and credit history signals operational maturity to underwriters.
- Two years of profitable returns. Most conventional bank and SBA lenders want to see two years of tax returns showing profitability. Online lenders may require only six months.
- Compare total cost, not just rate. A lender offering 7% APR with a 3% origination fee may cost more than one offering 8% APR with no fees, especially on short-term loans. Always compare effective APR and total cost of capital.
- Collateral reduces your rate. Secured loans (equipment, real estate, inventory) carry lower rates than unsecured working-capital loans because the lender has recourse if you default.
Disclaimer
For educational use only. Actual loan terms, fees, and approval depend on your creditworthiness, business financials, and lender policies. This is not financial, legal, or tax advice. Consult a licensed financial advisor or the SBA's resource partner network (SCORE, SBDCs) before making borrowing decisions.