$2,027.64
$2,060.97
$121,658.37
$21,658.37
$2,000.00
$23,658.37
$98,000.00
21.66
%
$2,027.64
$2,060.97
$121,658.37
$21,658.37
$2,000.00
$23,658.37
$98,000.00
21.66
%
The Business Loan Calculator helps entrepreneurs and business owners estimate the monthly payment and total cost of commercial financing. It accounts for origination or SBA guarantee fees, which are common in business lending and can significantly impact the overall cost of capital.
Business loans serve as the lifeblood of commercial growth, funding everything from startup capital and equipment purchases to expansion and working capital. The SBA (Small Business Administration) backed over $28 billion in small business loans in 2025, with the average SBA 7(a) loan amount around $479,000 and average term of 10-15 years.
Interest rates on business loans vary widely based on the type of financing, lender, and borrower qualifications. SBA loans typically range from 6% to 13%, conventional bank loans from 5% to 10%, and alternative online lenders from 10% to 40%. Understanding these costs before applying helps you prepare financially and negotiate better terms.
This calculator includes origination and SBA guarantee fees in its total cost calculation. SBA loans charge guarantee fees of 2% to 3.75% depending on loan size, and many lenders add origination fees of 1% to 5%. On a $200,000 loan, a 3% fee adds $6,000 to your borrowing cost — a significant expense that must be factored into your ROI analysis.
Before taking a business loan, calculate whether the expected revenue or cost savings from the loan's purpose will exceed the total borrowing cost. A well-structured business loan can accelerate growth, but overleveraging — taking on more debt than the business can service — is one of the leading causes of small business failure.
Monthly Payment = P × r × (1+r)^n / ((1+r)^n − 1), using the standard amortization formula.
Fee Amount = Principal × Fee%. Total Cost = Total Interest + Fee Amount. This represents the full cost of borrowing beyond the principal repayment.
Compare the total cost of the loan against the expected return on the borrowed capital. If a $100,000 loan costs $22,000 in interest and fees but generates $50,000 in additional profit, it is a sound investment. Always ensure your cash flow can comfortably cover the monthly payment.
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SBA $150K loan at 7.5% for 10 years. Monthly: $1,781. Total cost including 2% fee: $66,736.
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$50K equipment loan at 9% for 3 years. Monthly: $1,590. Total cost: $8,740.
SBA loans (7(a), 504, microloans), conventional bank loans, business lines of credit, equipment financing, invoice factoring, merchant cash advances, and online term loans. Each has different rates, terms, and qualification requirements.
SBA charges a guarantee fee of 2% (loans under $150K) to 3.75% (loans $700K-$5M) of the guaranteed portion. The fee can be financed into the loan or paid upfront. It enables lenders to offer more favorable terms.
SBA loans typically require 680+. Bank loans prefer 700+. Online lenders may accept 580+. Your business revenue, time in operation, and industry also factor into approval decisions.
SBA loans: 30-90 days. Bank loans: 2-6 weeks. Online lenders: 1-7 days. The fastest options (online lenders) usually charge higher rates for the convenience.
Yes, business loan interest is generally tax-deductible as a business expense. This effectively reduces the net cost of borrowing by your marginal tax rate (e.g., 21% for C-corps).
SBA loans require collateral for loans over $25,000 plus a personal guarantee. Bank loans typically require business or personal assets. Some online lenders offer unsecured loans but at higher rates.
DSCR = Net Operating Income / Total Debt Payments. Lenders typically require DSCR of 1.25 or higher, meaning your business income is 25% more than your total debt obligations.
Fixed rates provide payment certainty for budgeting. Variable rates start lower but can increase, creating uncertainty. For longer terms (5+ years), fixed rates offer more protection against rate increases.
A loan provides a lump sum repaid in fixed installments. A line of credit provides flexible access to funds — you draw as needed and only pay interest on the amount used. Lines of credit are better for variable working capital needs.
Compare the total cost (interest + all fees), not just the monthly payment or stated rate. Calculate the APR, review prepayment penalties, and check for personal guarantee requirements.
Roboculator Team
The Roboculator Team explains calculations, planning tools, and practical formulas in clear language for real-life situations.
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