Business Loan Calculator
Calculate your monthly business loan payment, total interest, and full amortization schedule for a fixed-rate small business loan.
Calculator verified • Last updated: August 2026
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Amortization Schedule
| Period | Payment | Principal | Interest | Balance |
|---|
Balance Over Time
The fixed payment covers mostly interest while the balance is largest, early in the loan — as the balance shrinks, less of each payment is needed for interest, so more goes toward principal and the balance falls faster in the later years.
How to Calculate a Business Loan Payment
A term business loan is repaid in equal fixed monthly payments using the standard amortization formula:
M: the monthly payment.
P: the amount borrowed.
r: the monthly interest rate (the annual rate divided by 12).
n: the number of monthly payments (loan term in years × 12).
What Determines a Business Loan's Interest Rate
Lenders price a business term loan based on the business's credit profile and cash flow, time in operation, the owner's personal credit history, whether the loan is secured by business or personal assets, and the loan's purpose and term. An established business with strong, consistent revenue typically qualifies for a meaningfully lower rate than a newer business with limited operating history, even for the same loan amount.
Term Loans vs. Other Business Financing
A term loan — a lump sum repaid on a fixed schedule, which is what this calculator models — is just one form of business financing. Lines of credit, equipment financing, and merchant cash advances all work differently: a line of credit is revolving rather than a fixed amortization schedule, and a merchant cash advance is repaid as a percentage of sales rather than a fixed monthly payment. This calculator applies specifically to the fixed-payment term loan structure.
Worked Example
A 100,000-dollar business loan at 9% over 5 years: the monthly rate is 9% ÷ 12 = 0.75%, and n = 60 payments. Plugging into the formula gives a monthly payment of about 2,076 dollars, with roughly 24,550 dollars in total interest paid over the 5 years.
Business Loan Terms You Should Know
Term Loan — a lump-sum loan repaid on a fixed schedule with a set interest rate and end date, as opposed to a revolving line of credit.
Collateral — business or personal assets pledged to secure the loan; a secured business loan typically carries a lower rate than an unsecured one.
Personal Guarantee — a commitment by the business owner to personally repay the loan if the business itself cannot, common on small-business lending regardless of whether the loan is otherwise secured.
Origination Fee — a one-time fee (typically 2%-5% of the loan amount for business and SBA term loans) deducted from the loan proceeds before disbursement. Enter it above to see your real "Amount You'll Actually Receive" — your monthly payment stays the same either way, since it's still calculated on the full loan amount, not the reduced proceeds.
SBA Guarantee Fee — a separate one-time fee on SBA 7(a) loans (typically 2%-3.75% of the guaranteed portion), charged in addition to any origination fee and also deducted from loan proceeds at disbursement, not from the monthly payment.
Debt Service Coverage Ratio (DSCR) — a lender's measure of whether a business's income can cover its loan payment, calculated as monthly revenue (or net operating income) divided by the monthly loan payment; many lenders look for a DSCR of at least 1.25.
This calculator provides estimates for informational purposes only and is not a loan offer, a guarantee of any specific rate or terms, or financial advice. Actual business loan terms depend on your lender and your business's qualifications — confirm exact figures with your lender.
Frequently Asked Questions
How is a business loan payment calculated?
The same fixed-rate amortization formula used for any installment loan: M = P × r(1+r)^n / [(1+r)^n − 1], where P is the amount borrowed, r is the monthly interest rate, and n is the number of monthly payments.
What affects the interest rate on a business loan?
Lenders weigh the business's credit history and revenue, time in operation, the owner's personal credit, whether the loan is secured by collateral, and the loan's purpose and term — a longer-established business with strong revenue typically qualifies for a lower rate than a new startup.
Does this calculator work for SBA loans?
It works for the payment math of any fixed-rate installment loan, SBA loans included, as long as you enter the loan's actual rate and term. SBA loans themselves often carry variable rates and additional guarantee fees not modeled here — check your lender's specific terms.
Does an origination fee change my monthly payment?
No. An origination fee is deducted from your loan proceeds at disbursement, not from your monthly payment — you still owe and pay interest on the full loan amount. The fee only reduces how much cash your business actually receives, which this calculator shows as "Amount You'll Actually Receive."
Is there a prepayment penalty if I pay off my business loan early, especially an SBA loan?
It depends on the loan. Conventional business term loans often have no prepayment penalty, but SBA 7(a) loans with a term of 15 years or longer commonly do: a declining penalty during the first three years (often around 5%, 3%, and 1% of the prepaid amount in years one, two, and three) if you prepay more than 25% of the outstanding balance in a single year, with no penalty after year three. SBA loans with terms under 15 years generally don't carry this penalty at all. Always check your specific loan agreement, since terms vary by lender and program.