Business Loan Calculator: Estimate Your Monthly Payments
Use our free 2026 business loan calculator to estimate monthly payments, total interest, and view a full amortization schedule. Perfect for SBA loans, small business loans, and commercial financing. Make informed borrowing decisions with instant calculations.
This calculator uses the standard amortization formula to compute your monthly payment based on principal, interest rate, and loan term.
Where M = Monthly Payment, P = Principal, r = Monthly Rate, n = Number of Payments
- Estimate loan affordability before applying
- Compare different loan offers easily
- Avoid over-borrowing or underestimating costs
- Perfect for startups and small businesses
- • Loan amount
- • Interest rate
- • Loan term
- • Credit score & business age
- • Origination fees
Our business loan calculator is designed to be simple and intuitive. Just enter a few key details about your loan, and you'll get instant results showing your monthly payment, total interest, and a complete amortization schedule.
Step-by-Step Guide:
- Enter Loan Amount: The total amount you want to borrow
- Enter Interest Rate: The annual interest rate (APR) offered by your lender
- Enter Loan Term: How many years you'll take to repay the loan
- Optional - Origination Fee: Any upfront fees charged by the lender (usually 1-5%)
- Click Calculate: Get instant results with payment breakdown and amortization schedule
The calculator uses the standard amortization formula to ensure accuracy. You can adjust any input to see how it affects your monthly payment and total cost.
SBA (Small Business Administration) loans are government-backed loans that offer competitive rates and favorable terms for small businesses. Understanding how SBA loan payments work can help you determine if this financing option is right for your business.
SBA 7(a) Loans
- • Loan amounts: Up to $5 million
- • Interest rates: 7-10% (variable)
- • Terms: 5-25 years depending on use
- • Best for: Working capital, equipment, real estate
SBA 504 Loans
- • Loan amounts: Up to $5.5 million
- • Interest rates: Fixed, typically 5-6%
- • Terms: 10-25 years
- • Best for: Real estate and major equipment
An amortization schedule is a table that shows how each loan payment is split between principal and interest over the entire life of the loan. It's an essential tool for understanding the true cost of borrowing and planning your business finances.
How Amortization Works:
Early Payments: Most of your payment goes toward interest, with only a small portion reducing the principal. This is because interest is calculated on the remaining balance.
Later Payments: As the principal decreases, more of each payment goes toward principal and less toward interest.
Equal Payments: Your monthly payment stays the same throughout the loan term, but the principal/interest split changes each month.
Our calculator generates a full amortization schedule showing each payment's breakdown. This helps you see exactly how much you'll pay in interest over time and how much principal you've paid off at any point in the loan.
Understanding the difference between APR and interest rate is crucial when comparing business loan offers. These two numbers tell different stories about the cost of borrowing.
Interest Rate
The cost of borrowing the principal amount, expressed as a percentage.
Example: 8% interest rate means you pay 8% of the loan amount annually in interest.
APR (Annual Percentage Rate)
The total cost of borrowing, including interest rate plus fees and other costs.
Example: 8% interest + 2% fees = approximately 10% APR.
There are several strategies you can use to reduce the total cost of your business loan. Even small changes can save you thousands of dollars over the life of the loan.
1. Improve Your Credit Score
A higher credit score can significantly lower your interest rate. Work on paying down existing debt, making all payments on time, and correcting any errors on your credit report before applying for a loan.
2. Choose a Shorter Loan Term
While shorter terms mean higher monthly payments, they result in much less total interest paid. For example, a 5-year loan typically costs 30-40% less in total interest than a 10-year loan for the same amount.
3. Make Extra Payments
If your loan allows prepayments without penalty, making extra principal payments can significantly reduce total interest. Even one extra payment per year can save thousands over the loan term.
4. Compare Multiple Lenders
Interest rates and fees vary significantly between lenders. Shop around and compare offers from banks, credit unions, online lenders, and SBA lenders to find the best deal.
5. Negotiate Fees
Origination fees, application fees, and other charges are often negotiable, especially if you have multiple loan offers. Don't be afraid to ask lenders to match or beat competitor offers.
How do you calculate a business loan payment?
Business loan payments are calculated using the amortization formula: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ-1], where M is the monthly payment, P is the principal loan amount, r is the monthly interest rate, and n is the number of payments. This formula ensures equal monthly payments that cover both principal and interest over the loan term. Our calculator does this automatically when you enter your loan details.
What is a good interest rate for a business loan in 2026?
Good interest rates for business loans in 2026 vary by creditworthiness and loan type. Excellent credit (720+) typically gets rates of 6-9%, good credit (680-719) gets 9-12%, and fair credit (620-679) gets 12-18%. SBA loans often offer competitive rates around 7-10% for qualified borrowers. Rates above 20% are considered high and may indicate higher risk or alternative lending products.
How much of a business loan can I qualify for?
Qualification amounts depend on your business revenue, credit score, time in business, and debt-to-income ratio. Most lenders offer loans up to 10-30% of annual revenue. SBA loans can go up to $5 million for 7(a) loans. Startups may qualify for $50,000-$250,000, while established businesses with strong financials can access much larger amounts. Use our calculator to estimate payments for different loan amounts and see what fits your budget.
What are the typical terms for a small business loan?
Typical small business loan terms range from 1-10 years, with most falling between 3-7 years. Short-term loans (1-2 years) have higher monthly payments but lower total interest. Long-term loans (5-10 years) have lower monthly payments but higher total interest costs. SBA loans typically offer terms of 5-25 years depending on the loan purpose. Equipment financing usually has terms matching the equipment's useful life (3-7 years).
How does an amortization schedule work for business loans?
An amortization schedule shows how each payment is split between principal and interest over the life of the loan. Early payments are mostly interest, while later payments are mostly principal. This schedule helps you understand the true cost of borrowing and see how much principal you've paid off at any point. Our calculator generates a full amortization schedule showing the breakdown for each payment.
Can I get a business loan with bad credit?
Yes, you can get a business loan with bad credit, but expect higher interest rates (often 20-30%+) and stricter terms. Alternative lenders, merchant cash advances, and secured loans are options. Improving your credit score, providing collateral, or getting a co-signer can help. SBA loans may be available with credit scores as low as 650 if you have strong business financials and can demonstrate ability to repay.
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal amount, while APR (Annual Percentage Rate) includes the interest rate plus fees and other costs. APR gives you a more accurate picture of the total cost of borrowing. For example, a loan with a 10% interest rate and 2% in fees has an APR of approximately 12%. Always compare APRs when shopping for loans, not just interest rates, to get the true cost comparison.