Business Loan Payment Calculator
Calculate your business loan repayments
Enter the loan amount, annual interest rate, and loan term in months to calculate your monthly payment, total interest, and total cost.
How to calculate business loan repayments
A business loan payment calculator uses the standard amortisation formula to determine your fixed monthly repayment amount. Unlike interest-only loans, an amortising loan has the same payment each month, with the proportion going to principal and interest shifting over time. Early payments are mostly interest; later payments are mostly principal.
The formula is: monthly payment = loan amount multiplied by (monthly rate multiplied by (1 + monthly rate) to the power of n) divided by ((1 + monthly rate) to the power of n minus 1), where n is the number of monthly payments. This gives a fixed payment that pays off the loan exactly at the end of the term.
Knowing your exact monthly payment is important for cash flow planning. A $100,000 loan at 7.5 percent over 5 years has a monthly payment of about $2,002. Over 7 years, the same loan would cost $1,556 per month. The longer term reduces your monthly obligation but significantly increases the total interest paid over the life of the loan.
What business loan rates should I expect?
Business loan rates vary significantly based on your business's creditworthiness, revenue history, collateral, and the type of loan. SBA loans (backed by the Small Business Administration in the US) typically offer some of the lowest rates, often 6 to 10 percent. Traditional bank loans tend to range from 5 to 13 percent. Alternative lenders and online lenders may charge 15 to 40 percent or more for higher-risk borrowers. Equipment financing and invoice factoring have their own rate structures.
How does loan term affect total cost?
A shorter loan term means higher monthly payments but significantly less total interest paid. A longer term reduces your monthly cash outflow but means you pay more in total over the life of the loan. If your business cash flow can support higher monthly payments, a shorter term almost always makes financial sense. Use this calculator to compare different terms side by side before committing.
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing expressed as a percentage of the outstanding balance per year. APR (Annual Percentage Rate) includes the interest rate plus any fees, origination charges, and other costs, expressed as an annualised rate. Always compare loans using APR rather than the stated interest rate, because two loans with the same interest rate can have very different true costs if one has high origination fees or prepayment penalties.
Can I pay off a business loan early?
Many business loans allow early repayment, but some charge a prepayment penalty. Before signing any loan agreement, check for prepayment clauses. If no penalty applies, making extra principal payments significantly reduces the total interest paid and shortens the loan term. Even one extra payment per year can have a meaningful impact over a five-year loan.
