Free Business Loan Calculator
Evaluate business loan options and calculate monthly payments for any commercial loan — term loans, SBA loans, equipment financing, and more. Our free business loan calculator computes your monthly payment, total interest cost, and total repayment amount based on loan principal, interest rate, and term length. Understanding the full cost of business financing helps you compare loan offers from banks, credit unions, and alternative lenders, evaluate whether projected revenue will cover debt service, and make confident borrowing decisions. Small business loans typically range from 6% to 30% APR depending on creditworthiness, loan type, and lender. SBA-guaranteed loans (7a and 504 programs) often offer the most favorable terms for qualifying businesses. Use this calculator to model different scenarios: compare a 5-year term vs. 3-year term, or evaluate whether a lower rate with fees is better than a higher rate with no fees.
How to Use
- Select your loan type: Term Loan, SBA Loan, or Equipment Financing.
- Enter the loan amount your business needs.
- Set the interest rate and loan term in years.
- Add an origination fee percentage if applicable.
- View your monthly payment, total interest, and effective APR instantly.
- Compare loan types using the comparison table and review the full amortization schedule.
FAQ
- What types of business loans can this calculate?
- This calculator works for any fixed-rate installment business loan including traditional bank term loans, SBA 7(a) and 504 loans, equipment financing, commercial vehicle loans, and business lines of credit with a fixed draw period. Variable-rate loans require re-calculation as the rate changes. For revolving lines of credit used in part, use the current outstanding balance as the principal.
- What is a DSCR and why does it matter?
- DSCR (Debt Service Coverage Ratio) measures your business's ability to cover its debt payments from operating income: DSCR = Net Operating Income ÷ Annual Debt Service. A DSCR of 1.25 means your business earns 25% more than needed to service its debt — the minimum most SBA lenders require. Below 1.0 means your income doesn't cover debt payments. Use this calculator to determine your annual debt service (monthly payment × 12), then divide your net operating income by that figure to check your DSCR before applying.
- What interest rates should I expect?
- Business loan rates vary widely: SBA loans currently range from approximately 7–12% APR; traditional bank term loans range from 6–15%; online lenders and alternative lenders range from 15–40%+ for riskier borrowers. Rates depend on your personal and business credit scores, time in business (2+ years preferred), annual revenue, collateral, and the specific loan program. A higher rate over a shorter term often costs less total interest than a lower rate over a longer term.
- Should I choose a shorter or longer loan term?
- Shorter terms mean higher monthly payments but significantly less total interest paid. Longer terms lower your monthly cash outflow but increase total borrowing cost. Choose the term based on: (1) cash flow — the monthly payment must be comfortably covered by business revenue; (2) asset life — equipment loans shouldn't exceed the useful life of the asset; and (3) total cost — if cash flow allows, a shorter term is almost always financially superior. Model both scenarios in this calculator to see the exact dollar difference.