💼 Business Loan Calculator
Calculate business loan payments and costs
Principal loan amount
Annual percentage rate (APR)
Number of months to repay
How to Use This Calculator
Enter Loan Amount
Input the principal amount you want to borrow for your business.
Enter Interest Rate
Input the annual interest rate (APR) offered by the lender.
Enter Loan Term
Input the number of months you'll have to repay the loan.
Review Results
Examine monthly payment, total interest, and total cost to determine loan affordability.
Formula
Monthly Payment (Amortizing Loan):
M = P × [r(1 + r)ⁿ] / [(1 + r)ⁿ - 1]
Where: M = Monthly payment, P = Principal, r = Monthly interest rate, n = Number of months
Total Interest:
Total Interest = (Monthly Payment × Term) - Principal
Example: $100,000 Business Loan
Loan Amount: $100,000, Annual Rate: 6.5%, Term: 60 months (5 years)
Monthly Rate: 6.5% / 12 = 0.5417%
Monthly Payment: $100,000 × [0.005417(1.005417)⁶⁰] / [(1.005417)⁶⁰ - 1] = $1,956.02
Total Payments: $1,956.02 × 60 = $117,361.20
Total Interest: $117,361.20 - $100,000 = $17,361.20
About Business Loan Calculator
The Business Loan Calculator helps business owners calculate loan payments, total interest costs, and determine loan affordability. This tool uses standard amortization formulas to calculate monthly payments for business loans, helping you make informed financing decisions and plan for loan repayment.
When to Use This Calculator
- Loan Comparison: Compare different loan offers to find the best terms
- Affordability Analysis: Determine if you can afford monthly loan payments
- Business Planning: Plan for loan repayment in your business budget
- Investment Decisions: Calculate total cost of borrowing for business investments
- Loan Negotiation: Understand loan terms before negotiating with lenders
- Financial Projections: Include loan payments in financial forecasts
Why Use Our Calculator?
- ✅ Accurate Calculations: Uses standard amortization formulas for precise results
- ✅ Complete Information: Shows monthly payment, total interest, and total cost
- ✅ Quick Comparison: Easily compare different loan terms and rates
- ✅ Clear Results: Easy-to-understand display of loan costs
- ✅ Free Tool: No cost for essential loan analysis
Common Applications
- Equipment Financing: Calculate payments for equipment loans
- Working Capital: Determine costs of working capital loans
- Business Expansion: Plan for expansion financing
- Startup Funding: Calculate costs of business startup loans
Tips for Best Results
- Compare Multiple Offers: Calculate payments for different loan offers to find the best deal
- Consider Total Cost: Look at total interest, not just monthly payment
- Factor in Fees: Add origination fees and other costs to the loan amount
- Plan for Cash Flow: Ensure monthly payments fit your cash flow projections
- Consider Early Payoff: Calculate savings if you pay off early
Frequently Asked Questions
What is an amortizing loan?
An amortizing loan is a loan where you make regular payments that include both principal and interest. Each payment reduces the principal balance until the loan is fully paid off.
How is monthly payment calculated?
Monthly payment uses the amortization formula that accounts for principal, interest rate, and loan term. It ensures equal payments over the loan term that fully pay off the loan.
What's the difference between APR and interest rate?
APR (Annual Percentage Rate) includes the interest rate plus fees and other loan costs. The interest rate is just the cost of borrowing. APR gives a more complete picture of loan cost.
Can I pay off the loan early?
Most business loans allow early payoff, but check for prepayment penalties. Early payoff saves interest but may involve fees. Calculate the net savings before paying early.
What if I make extra payments?
Extra payments reduce the principal balance, which reduces total interest and shortens the loan term. You'll pay off the loan faster and save on interest.
How do I choose between different loan terms?
Shorter terms have higher monthly payments but lower total interest. Longer terms have lower monthly payments but higher total interest. Choose based on your cash flow and total cost preferences.