Business Loan Calculator
Calculate monthly payments, total costs, and APR for your business loan with comprehensive fee analysis
Loan Parameters
Additional Fees
Fee paid upfront when loan is issued
Fee included in loan amount with interest
Fee for processing the loan ($8,000.00)
How the origination fee is handled
Loan Breakdown
Business Loan Types
Term Loans
Fixed amount with regular payments
Best for expansion and equipment
Lines of Credit
Flexible borrowing up to limit
Good for cash flow management
Equipment Financing
Loan secured by equipment
Lower rates, equipment as collateral
Invoice Financing
Advance on outstanding invoices
Quick access to working capital
Loan Application Tips
Maintain a strong business credit score (700+ is ideal)
Prepare detailed financial statements and business plan
Compare APRs, not just interest rates
Consider the total cost of the loan over its lifetime
Shop around with multiple lenders for best terms
APR vs Interest Rate
Interest Rate
The cost of borrowing the principal amount, expressed as a percentage
APR (Annual Percentage Rate)
Includes interest rate plus additional fees and costs, giving a true picture of loan cost
Tip: Always compare APRs when shopping for loans as they provide a more accurate comparison of the total cost.
Understanding Business Loan Calculations
Payment Calculation
Monthly payments are calculated using the standard loan amortization formula that considers:
- • Principal loan amount (including fees if rolled into loan)
- • Annual interest rate divided by 12 for monthly rate
- • Total number of monthly payments
Key Formulas
Monthly Payment = P × [r(1+r)^n] / [(1+r)^n - 1]
Where: P = Principal, r = Monthly rate, n = Number of payments
Total Interest = (Monthly Payment × n) - Principal
APR = (Total Finance Charge / Principal) / Years × 100
Fee Types Explained
Prepaid Fees
Paid upfront when the loan is issued. These fees increase the APR but don't accrue interest.
Loaned Fees
Added to the loan amount and subject to interest charges throughout the loan term.
Origination Fees
Cover loan processing costs. Can be deducted from loan amount, rolled into the loan, or paid separately.
Loan Considerations
- •Secured loans typically offer lower interest rates than unsecured loans
- •Shorter loan terms mean higher monthly payments but less total interest
- •Check for prepayment penalties if you plan to pay off the loan early