Business Loan Calculator

Loan Summary

Monthly Payment --

Total Interest Paid --

Total Amount Repaid --

Interest as % of Principal --

Partner Offer

SoFi Checking & Savings

Use my link to get up to $425 in cash bonuses with SoFi. You'll get a $25 bonus when you open a SoFi Checking and Savings account, and either $50 or $400 when you set up eligible direct deposit of $1,000 or more. Terms apply.

Open a SoFi Account

Referral link. We may earn a bonus if you sign up, at no extra cost to you.

How Business Loan Payments Work

Most business loans use what is called an amortizing structure. That means each monthly payment covers a portion of the interest and a portion of the principal. In the early months, most of your payment goes toward interest. As the balance shrinks over time, more of each payment goes toward paying down the principal.

The interest rate listed in your loan agreement is the annual rate. To get the monthly interest, divide by 12. On a $50,000 loan at 8% annual interest, the first month's interest charge is about $333 (50,000 times 0.08 divided by 12). Your monthly payment on a 5-year term would be about $1,014, so $681 of that first payment goes toward the principal, with the remaining $333 covering interest.

By the last year of the loan, almost the entire payment goes toward principal because the remaining balance is so much smaller. This is why paying extra toward the principal early in the loan term saves the most money on total interest paid.

Common Business Loan Types

SBA 7(a) loans are the most common SBA loan product. They can be used for working capital, equipment, real estate, or refinancing existing debt. Loan amounts go up to $5 million with terms up to 10 years for working capital and up to 25 years for real estate. Interest rates are tied to the prime rate plus a spread, typically landing between 10% and 15% as of 2026.

Bank term loans from traditional lenders usually offer the lowest rates for established businesses with strong credit. You typically need at least two years of business history and annual revenue above $100,000 to qualify. Rates range from 6% to 12% depending on your credit profile and collateral.

Online lenders like Kabbage, BlueVine, and Fundbox approve faster and have lower qualification thresholds, but charge higher rates, often 10% to 30%. These make sense for short-term needs when speed matters more than cost, but they are expensive for long-term borrowing.

Note: This calculator provides estimates based on a standard amortizing loan structure. Actual loan terms, fees, and payment schedules vary by lender. SBA loans may include guarantee fees not reflected here. This is not financial advice. Consult a qualified financial advisor or lender for guidance on your specific borrowing situation.

Frequently Asked Questions

How do I calculate a business loan payment?

A business loan payment is calculated using the loan amount, the annual interest rate, and the loan term in months. The standard formula is M = P[r(1+r)^n] / [(1+r)^n - 1], where M is the monthly payment, P is the principal, r is the monthly interest rate (annual rate divided by 12), and n is the number of monthly payments. This calculator does that math for you.

What is a typical interest rate for a small business loan?

Interest rates for small business loans vary widely depending on the lender, loan type, and your creditworthiness. SBA 7(a) loans typically range from 10% to 15%. Bank term loans for established businesses range from 6% to 12%. Online lender rates can be higher, from 10% to 30%. Equipment financing usually falls between 6% and 20%.

What is the difference between an SBA loan and a regular business loan?

SBA loans are partially guaranteed by the Small Business Administration, which reduces the lender's risk. This guarantee means SBA loans typically have lower interest rates, longer repayment terms, and lower down payment requirements than conventional business loans. The trade-off is that SBA loans take longer to process and have more paperwork requirements.

Should I pay off my business loan early?

Paying off a business loan early saves you money on interest, but check your loan agreement for prepayment penalties first. Some lenders charge a fee for early payoff, typically 1% to 5% of the remaining balance. SBA 7(a) loans with terms of 15 years or more may have prepayment penalties during the first three years. If there is no penalty, paying early is almost always a good financial move.