Business Loan Calculator
- Updated
- Formula shown
- Free, no sign-up
Results
Monthly payment of $2,075.84 for 60 payments; APR including fees 9.87%
| Frequency | Payment | Payments | Total interest | APR |
|---|---|---|---|---|
| Monthly (yours) | $2,075.84 | 60 | $24,550 | 9.87% |
| Every two weeks | $956.55 | 130 | $24,352 | 9.87% |
| Weekly | $477.95 | 260 | $24,267 | 9.87% |
Some online lenders and merchant cash advances quote a factor rate (for example 1.2) instead of an interest rate. A factor rate is not an APR; do not enter it here.
How to use the business loan calculator
- Enter the loan amount, the annual interest rate and the term.
- Enter the origination fee as a percentage and any other flat fees charged when the loan is funded.
- Choose the payment frequency your lender uses. Many online lenders collect weekly or every two weeks.
- Compare the APR and the total cost, and use the table to see the same loan at each frequency.
Business loan formulas
Fees = P × fee % + flat fees; Net proceeds = P − fees
APR = a × payments per year, where Net proceeds = Payment × (1 − (1 + a)−n) ÷ a
P is the loan amount and n the number of payments (years × payments per year). The payment is the standard amortizing-loan payment. Because the fees come out of the money you receive while the payments stay the same, the APR is the rate per period a that equates the payments with the net proceeds, multiplied by the number of payments a year. The calculator assumes fees are deducted from the proceeds, which is common for term loans.
Worked example
A $100,000 loan at 9% for 5 years with a 2% origination fee has a monthly payment of $2,075.84. The fee is $2,000, so the business receives $98,000. Interest totals $24,550, the loan costs $26,550 including the fee, and the APR is 9.87%.
Paid weekly instead, the same loan takes 260 payments of $477.95 and $24,267 of interest. The interest is slightly lower because the balance falls a little faster, but weekly debits need steady cash flow.
APR by fee and term
A $100,000 loan at a 9% interest rate, monthly payments, fee deducted from the proceeds.
| Origination fee | 3 years | 5 years | 10 years |
|---|---|---|---|
| 0% | 9% | 9% | 9% |
| 1% | 9.69% | 9.43% | 9.24% |
| 2% | 10.39% | 9.87% | 9.48% |
| 3% | 11.09% | 10.31% | 9.72% |
| 5% | 12.54% | 11.22% | 10.21% |
Factor rates are not interest rates
Merchant cash advances and some short-term online loans quote a factor rate: you repay the advance times the factor. A 1.2 factor on $50,000 means repaying $60,000. Because the cost is fixed but the term is short, the equivalent APR can be very high. If the $60,000 were repaid in equal weekly payments:
| Repaid over | Weekly payment | Equivalent APR |
|---|---|---|
| 26 weeks | $2,307.69 | 72.8% |
| 52 weeks | $1,153.85 | 37% |
| 78 weeks | $769.23 | 24.8% |
Advances repaid as a share of daily card sales have no fixed schedule, so their APR depends on how quickly you repay. Ask the provider for an APR estimate.
Tips
Lenders package business credit in very different ways, so put every offer into the same terms before you decide: the amount you actually receive, the payment and how often it is collected, the total you will repay and the APR.
- Compare on APR and total cost, not the headline rate. The APR calculator helps with other fee structures.
- Match the term to the use. Short-term needs such as inventory suit short loans; equipment or property can justify longer terms.
- Read the prepayment terms. Some business loans charge a penalty or keep the full interest if you repay early.
- Check personal guarantees and collateral before you sign; they can put personal assets at risk.
Results are estimates for comparison. Your lender's documents give the exact payment, fees and APR.
Frequently asked questions
What is the monthly payment on a $100,000 business loan?
At 9% over 5 years it is $2,075.84 a month, with $24,550 of interest. With a 2% origination fee deducted, the business receives $98,000 and the APR is about 9.87%.
Are weekly payments cheaper than monthly payments?
Slightly, because the balance falls sooner. The same $100,000 loan at 9% over 5 years costs $24,267 in interest with 260 weekly payments of $477.95, against $24,550 with monthly payments. The bigger question is whether your cash flow can handle weekly debits.
How do fees affect the APR on a business loan?
Fees taken from the proceeds raise the APR, and more so on shorter loans. On $100,000 at 9% for 5 years, a 3% fee plus $1,500 of other fees raises the APR to about 10.99%.
What is a factor rate?
A pricing method used by merchant cash advances and some short-term lenders: you repay the advance times the factor. A 1.2 factor on $50,000 means repaying $60,000. Repaid in equal weekly payments over 52 weeks, that is roughly a 37% APR; over 26 weeks it is roughly 73%.
Can I pay off a business loan early?
Often, but check the agreement. Some business loans charge a prepayment penalty, and loans priced with a factor rate may require the full repayment amount even if you pay early.