Business Loan Calculator — Payment, Interest & Amortization

Guide

About the Business Loan Calculator

The Business Loan Calculator estimates your monthly payment, total interest, and full amortization schedule for a term loan, SBA loan, or other fixed-rate commercial financing. It's built for founders and finance teams comparing lender offers before signing, and for anyone who wants to see exactly how much of each payment goes to interest versus principal over the life of the loan.

How It Works

You enter the loan amount, annual interest rate, loan term in years, and an optional origination fee percentage. The calculator converts the annual rate to a monthly rate and the term to a number of monthly payments, then applies the standard amortizing loan formula to compute a fixed monthly payment. It then runs a month-by-month amortization loop — each month's interest is the remaining balance times the monthly rate, and the rest of the payment reduces principal — and aggregates the results into a year-by-year table and a remaining-balance chart so you can see the payoff curve at a glance.

Why It Matters

Knowing your exact monthly payment and total interest cost before signing helps you budget cash flow, compare multiple lender quotes on a true apples-to-apples basis, and understand how an origination fee — which doesn't change your monthly payment but does add to your total borrowing cost — affects the real price of the loan.

Tips for Accurate Results

Use the actual APR quoted by the lender, not just the headline "interest rate," if the two differ — they can produce meaningfully different payments.
Remember the origination fee is typically deducted from your disbursed funds or billed separately; it doesn't reduce the amount you owe or change your monthly payment calculation.
Re-run the calculation with a shorter term to see how much total interest you'd save versus how much higher the monthly payment would climb.
If your loan has a variable rate, treat this as a snapshot — payments will shift if the rate changes during the term.

This is an estimate for planning purposes — consult your lender or a financial advisor for exact terms before committing to a loan.

Formula

How Business Loan Payments are Calculated

Business loans typically use a fixed monthly payment that fully amortizes the balance by the end of the term.

Monthly Payment Formula

M = P × r × (1 + r)^n / ((1 + r)^n − 1)
where P = loan amount, r = annual rate / 12, n = term in years × 12

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Interest Front-Loads

Early payments are mostly interest because the balance is highest at the start. As the balance falls, more of each fixed payment goes toward principal.

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Origination Fees Add Up

A 1-5% origination fee on a $100,000 loan is $1,000-$5,000 added to your total cost, even though it doesn't change the monthly payment.

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Term Length Trade-Off

Stretching the term lowers monthly payments but increases total interest paid. Run both scenarios before deciding.

FAQ

Frequently Asked Questions

Common questions about business loan calculations

How is a business loan payment calculated?

Business loan payments use the standard amortizing loan formula: M = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. Each payment is split between interest (on the remaining balance) and principal, with the principal portion growing over time.

What affects my business loan interest rate?

Lenders price business loans based on your credit score and business credit history, time in business, annual revenue, collateral offered, loan type (SBA, term loan, line of credit), and current market rates. Stronger financials and collateral typically unlock lower rates.

What is an origination fee?

An origination fee is an upfront charge (typically 0.5%-5% of the loan amount) that lenders deduct or bill at closing to cover underwriting and processing costs. It does not change your monthly payment, but it does add to the total cost of borrowing, so it should be factored into any true cost comparison between lenders.

Should I choose a shorter or longer loan term?

A shorter term means higher monthly payments but far less total interest paid over the life of the loan. A longer term lowers the monthly payment, easing cash flow, but increases total interest cost. Choose based on how much monthly payment your cash flow can safely absorb versus how much total interest you're willing to pay.

What's included in the Total Cost of Loan figure?

Total Cost of Loan adds your Total Payment (all principal plus interest over the full term) to the origination fee amount, giving the true all-in cost of borrowing rather than just the interest expense.

Can I calculate a loan term shorter than one year?

Yes. Enter the Loan Term in years using decimals — for example, 0.5 for a 6-month loan. The minimum allowed term is 0.5 years.

What happens if I enter a 0% interest rate?

With a 0% rate, the calculator skips the compounding formula and simply divides the loan amount evenly across the number of payments, so your Total Interest is $0 and each payment is pure principal.

How do I export my business loan results?

Click "Export Result" below the results panel to download a text file with your loan inputs (amount, rate, term, origination fee) and outputs (monthly payment, total interest, total payment, total cost).

Why does the amortization table cap at 10 rows?

The Year-by-Year Amortization table displays up to 10 rows to keep it readable. If your term runs longer than 10 years, a summary row notes the year the loan is fully paid off instead of listing every remaining year.

What types of business loans can I model with this calculator?

It's built for fixed-rate, fixed-term financing such as term loans and SBA loans, where you borrow a lump sum and repay it in equal monthly installments. It doesn't model revolving lines of credit or loans with a variable rate that changes mid-term.

Is the origination fee deducted from my loan proceeds or billed separately?

It depends on the lender — some deduct the origination fee from the funds they disburse to you, others bill it separately at closing. Either way, it doesn't change your monthly payment calculation, which is based on the full loan amount you enter.

What's the difference between APR and the interest rate I enter here?

APR typically bundles the interest rate with fees like the origination fee into a single annualized cost figure used for lender disclosures. The Annual Interest Rate you enter here is just the nominal rate used to compute the amortizing payment; this calculator shows the origination fee's cost separately rather than blending it into an APR.

🏢 Business Loan Calculator