Business Loan Calculator - Payments, APR, Origination Fee, and Amortization Schedule
Business Loan Calculator
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Select a business scenario to instantly load realistic loan parameters and see industry-specific insights.
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Understanding Business Loans: Rates, Terms, APR, Fees, and SBA Programs
What is a Business Loan?
A business loan provides capital for working capital, expansion, equipment, or inventory. Common types include term loans, SBA-backed loans, lines of credit, and equipment financing. Key variables are principal, interest rate, term, repayment frequency, and fees.
APR vs Nominal Interest
Nominal interest is the stated annual rate used to calculate periodic interest. APR incorporates certain fees and provides a more complete view of borrowing cost. Lower APRs generally indicate better total cost.
Origination Fee Impact
Many business loans include an origination fee (e.g., 1-3%). While it does not affect the periodic payment directly, it adds to the total cost of borrowing. Negotiating this fee can materially reduce total cost.
Prepayment and Payoff Time
Extra payments reduce principal faster, cutting total interest and shortening payoff time. Even modest prepayments can have outsized benefits over multi-year terms.
SBA Fees Explained
SBA-guaranteed loans often include a one-time guarantee fee and an annual servicing fee charged on the outstanding balance. The guarantee fee increases upfront cost, while the annual fee behaves like a periodic surcharge on top of interest. This page approximates both so you can compare effective costs across lenders.
Cash Flow & DSCR
DSCR (Debt Service Coverage Ratio) = EBITDA / Annual Debt Service. Lenders commonly look for at least 1.25x. Improving EBITDA, extending term, or lowering the loan amount can raise DSCR and improve approval odds.
Frequently Asked Questions
What repayment frequencies are supported?
Monthly, bi-weekly, and weekly schedules are supported.
Do prepayments change the payment amount?
This tool models extra payments to reduce principal faster. Payment shown is scheduled plus extra.
Is APR the same as the interest rate?
No. APR typically includes certain fees while the nominal rate does not.
Can I use this for SBA loans?
Yes. Use the fee and rate fields to approximate SBA structures.
How accurate are the results?
Results are estimates using standard amortization formulas. Actual lender terms may vary.
What DSCR do lenders expect?
Many lenders require DSCR ≥ 1.25x as a minimum. Higher DSCR indicates stronger repayment capacity and may qualify you for better terms.
How can I reduce total borrowing cost?
Compare multiple offers, negotiate origination/guarantee fees, consider longer terms for cash flow, and use prepayments to reduce interest over time.