Business Loan Calculator
The payment a business loan demands — and what it really costs. Beyond the standard amortization (any compounding, any payback frequency, plus interest-only and pay-at-maturity structures), this calculator charges the origination and documentation fees against the proceeds and solves for the real APR: the rate you'd quote if the fees were interest, because economically, they are.
The defaults are not a trick: $1,250 of fees on a $10,000 five-year loan is expensive money, and short terms make fees bite harder (the same fees on a 10-year term would add roughly half as much to the APR). Always compare business loans on the real APR, never the headline rate.
Business Loans and the SBA
Business loans fund starts, acquisitions, equipment, real estate, franchises and plain working capital, and they repay like other loans — principal plus interest, usually monthly, sometimes weekly, daily, interest-only, or in a single balloon at maturity. In the U.S., the defining institution is the Small Business Administration. The SBA doesn't lend directly; it guarantees 75–90% of loans made by banks and other lenders, which makes credit available to businesses too young or too small for conventional underwriting — at the price of extra paperwork, guarantee fees, and slower approvals.
The SBA Menu
The 7(a) loan is the flagship — over three-quarters of SBA lending: up to $5 million for working capital (10 years) or fixed assets (up to 25 years), funding everything from start-ups to debt refinancing. Microloans serve the smallest borrowers: up to $50,000 (average nearer $15,000), six years maximum, for anything except real estate or paying off old debt. CDC/504 loans finance real estate and major equipment at long fixed rates up to $5.5 million — but never working capital or inventory. Disaster loans (up to $2 million) repair assets damaged by a declared disaster. Beyond the SBA, conventional bank loans carry no government guarantee — typically higher rates and shorter terms, but a faster, less regulated process — and the market adds mezzanine, asset-based and invoice financing, merchant cash advances, and, for the smallest needs, personal loans taken in the owner's name.
Fees: Where the Real Rate Hides
The origination fee (commonly 1–6% of the amount) pays for processing and underwriting; the documentation fee is a flat charge for the paperwork; an application fee may precede both. Over the loan's life, lenders may add administrative or annual fees, service charges, wire fees, late-payment fees, and prepayment penalties. None of these is interest, and all of them are cost — which is why the honest comparison number is the fee-inclusive APR this calculator solves: the rate at which the payments you make equal the proceeds you actually receive. At the defaults, fees lift a 10% loan to a real APR near 15.9%; on a larger, longer loan the same dollar fees would matter far less, which is itself a reason to negotiate fees before rates.
Frequently Asked Questions
Do the fees reduce my proceeds or get added to the loan?
Either happens in practice. This calculator follows the conservative reading used for APR disclosure: fees are charged against the amount, so you receive the loan minus fees while paying on the full amount. If your lender instead finances the fees into the balance, the payment — not just the APR — rises.
What payback frequency do real business loans use?
Monthly is standard for bank and SBA loans. Daily and weekly repayment is the signature of merchant cash advances and short-term online loans — structures whose rates look modest per payment and enormous per year; run them through the real-APR math here before signing.
Is an interest-only business loan cheaper?
Per month, much cheaper; in total, more expensive, because the balance never falls. At the defaults it costs $5,000 of interest against $2,748 amortized — and leaves the $10,000 principal due in full at the end.