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Business Loan Calculator
Calculate monthly business loan payments, total interest paid, and total cost of financing for any loan amount, interest rate, and term. Compare different loan options and find the true annual percentage rate (APR) for your business borrowing.
Business loans are a critical growth tool but must be evaluated carefully. The monthly payment is just one factor — total interest paid over the loan life reveals the true cost of capital. A $200,000 loan at 8% for 10 years costs $91,473 in total interest — 46% above the principal. Understanding true loan cost helps make informed financing decisions.
Formula
Monthly Payment = P × [r(1+r)^n] / [(1+r)^n - 1] | Total Interest = (Payment × n) - Principal | True APR accounts for fees and closing costs
Business Loan Types and Rates
Business loans come in many forms with different rates, terms, requirements, and use cases. Understanding the differences helps match the right financing to your business needs and stage.
Loan Type
Rate Range
Amount Range
Term
SBA 7(a) Loan
6.5-9% (2024)
$5M max
Up to 10 years (25 for real estate)
SBA 504 Loan
5.5-7%
$5.5M max
10-25 years, equipment/real estate
Bank Term Loan
7-12%
Varies
3-10 years, established businesses
Business Line of Credit
8-24%
$10K-$1M
Revolving, flexible draws
Equipment Financing
6-9%
Up to asset value
2-7 years, collateralized by equipment
Invoice Factoring
1-5%/month
70-90% of invoice
Short-term, high effective APR
Merchant Cash Advance
40-150% APR
$5K-$500K
Daily/weekly repayment from sales
SBA vs Conventional Business Loans
SBA (Small Business Administration) loans: government-guaranteed, lower rates, longer terms, but more paperwork and slower (2-3 months). Best for established businesses needing large capital at favorable rates. Conventional bank loans: faster (2-6 weeks), less paperwork, but higher rates and stricter credit requirements. Online lenders (Kabbage, Fundbox, BlueVine): fast approval (1-3 days), but very high rates (20-60% APR) — appropriate only for short-term cash flow gaps.
Frequently Asked Questions
2024 business loan rates: SBA 7(a) loans: 6.5-9%. Conventional bank loans: 7-12%. Online/alternative lenders: 20-50%+ APR. Business credit cards: 20-26% APR. Rates depend on credit score, time in business, revenue, collateral, and market conditions. Strong businesses with 2+ years of history and good credit qualify for the best rates.
Typical requirements: 2+ years in business (some lenders accept 1 year). Minimum annual revenue ($100,000-$250,000 depending on lender). Personal credit score 680+ (620+ for SBA, higher for conventional). Business credit score (DUNS, Experian Business). Collateral (personal guarantee often required for loans under $350,000). Profitability or clear path to profitability.
The SBA 7(a) is the most common SBA loan program. Provides up to $5 million with terms up to 10 years (25 years for real estate). Government guarantee: 85% on loans up to $150,000, 75% on larger loans — reduces lender risk, enabling lower rates than conventional loans. Rates: prime + 2.25-4.75%. Application takes 2-3 months. Best for established businesses with good credit.
Typical required documents: 2-3 years of business tax returns, 2-3 years of personal tax returns (if you own 20%+), business financial statements (P&L and balance sheet), bank statements (3-12 months), business plan with financial projections (for startup or growth loans), business licenses, articles of incorporation, and accounts receivable/payable aging.
Longer terms = lower monthly payment but much higher total interest. $200,000 at 8%: 5-year term = $4,056/month, $43,371 total interest. 10-year term = $2,426/month, $91,473 total interest. Longer term costs $48,102 more. Choose the shortest term you can service comfortably — the interest savings are substantial.
Interest rate: the base annual rate applied to the principal. APR (Annual Percentage Rate): total cost including interest, fees, and origination costs expressed as an annual rate. A loan with 7% interest rate and 2% origination fee has a higher APR than the stated 7%. APR allows apples-to-apples comparison between loans with different fee structures. Always compare APR, not just interest rate.