Business Loan

Business Loan Calculator Estimate payments for term loans, SBA loans, or lines of credit — including fees, interest, and ...

Business Loan Calculator

Estimate payments for term loans, SBA loans, or lines of credit — including fees, interest, and amortization.

Term Loan

SBA Loan

Line of Credit

Loan Amount ($)

Annual Interest Rate (%)

Term (Years)

SBA Loan Notes:
• SBA 7(a): Up to $5M, partial government guarantee
• SBA 504: For real estate/equipment, fixed 20-yr term
• Typical fees: 3–5% guarantee fee (included below)

SBA Guarantee Fee (%)

Line of Credit Notes:
• Revolving credit — draw & repay as needed
• Interest only on amount used
• Annual fee: 0.5–2% of credit limit

Annual Fee (%)

Avg. Utilization (%)

Origination Fee (%)

Payment Frequency Monthly Quarterly Annual

$0

Monthly Payment

$0

Total Interest

$0

Total Fees

0%

Effective APR

Loan Cost Breakdown Over Time

Period	Payment	Principal	Interest	Balance

Types of Business Loans

1. Term Loan

Lump-sum funding repaid in fixed installments. Best for: equipment, renovations, expansion.

• Terms: 1–25 years
• Rates: 6–30% (bank vs. online lender)
• Collateral: Often required (equipment, real estate)

2. SBA Loan (7a or 504)

Backed by U.S. Small Business Administration. Lower rates, longer terms, but stricter requirements.

• SBA 7(a): General purpose, up to $5M, 10-yr term
• SBA 504: Real estate/equipment, fixed 20-yr, 10% down
• Fees: 3–5% guarantee fee (on guaranteed portion)

3. Line of Credit (LOC)

Revolving credit — draw funds as needed, repay, reuse. Ideal for cash flow gaps or seasonal needs.

• No fixed term — ongoing until canceled
• Interest only on amount used
• Annual maintenance fee: 0.5–2%

APR vs. Interest Rate — Why It Matters

The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes interest + all fees (origination, SBA, processing), giving the true cost of capital.

Example: $100,000 loan at 7% interest + 3% SBA fee + 1% origination = $4,000 in fees.
→ Effective APR ≈ **8.2%**, not 7%!

Always compare APRs — not just interest rates — when shopping lenders.

Note: For lines of credit, APR depends on utilization — higher usage = lower effective APR.

Common Loan Pitfalls

• Prepayment penalties — Some lenders charge 1–5% for early payoff (common in SBA 504).
• Covenants — Financial ratios (e.g., debt-to-income ≤ 3.5x) you must maintain — breach can trigger default.
• Balloon payments — Small payments for years, then large lump sum due (high risk!)
• Personal guarantees — Owners are personally liable if business defaults (very common for <$500K loans).
• UCC liens — Lenders file liens on business assets — affects future financing.

Pro Tip: Ask: “Is there a prepayment penalty? What covenants apply? Is a personal guarantee required?”

How to Use This Calculator

1. Select your loan type (Term, SBA, or LOC).
2. Enter loan amount, interest rate, term.
3. Add applicable fees (SBA guarantee, origination, annual).
4. For LOC: estimate average utilization (e.g., 60% = you use $60K of a $100K line).
5. Choose payment frequency.
6. Click “Calculate Business Loan”.

You’ll get:

• Monthly/quarterly payment amount
• Total interest and fees
• Effective APR
• Amortization schedule
• Visual chart of principal vs. interest

Note: This calculator assumes fixed-rate, fully amortizing loans. It does not model balloon payments, variable rates, or compounding daily/weekly.