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Estimate your payments to understand the cost of a business loan
The amount you pay over the loan term
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Payment Breakdown
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Compare and personalize small business loan rates
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Enter your loan amount, repayment term, and annual percentage rate into NerdWallet's business loan calculator to estimate your monthly payment, total interest cost, and total repayment amount. Then, adjust your loan characteristics to see how the changes affect your repayments.
How to use a business loan calculator
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Please enter your information. Enter the loan amount, repayment term, and Annual Percentage Rate (APR) into the calculator. Make sure the repayment term is listed in months.
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Calculate the result. Click “Calculate” and the calculator will automatically generate results. Feel free to adjust the inputs to understand different loan scenarios.
How the APR is determined
The APR makes it easier to make an apples-to-apples comparison between loan products. However, some lenders don't provide an APR and instead give you a prevailing interest rate or factor rate that doesn't include fees. In that case, you'll need to calculate the interest rate or factor rate into the APR to get a more accurate idea of how much your loan will cost.
For prevailing interest rates, add in the surcharge to calculate the APR.
For example, say you have a $60,000 loan with a 4% interest rate and $2,000 in fees. First, add these fees to the original loan amount to create a new loan amount of $62,000.
Next, use an interest rate of 4% to calculate the annual payment of $2,480 ($62,000 x 0.04). To calculate the APR, divide the annual payment of $2,480 by the original loan amount of $60,000 to get 4.13%.
The factor rate is expressed as a decimal, not a percentage. Multiply the factor rate by the loan amount to find the total amount you'll pay to the lender. For example, if you have a $50,000 loan with a factor rate of 1.2, you'll pay a total of $60,000 ($50,000 x 1.2), meaning your total interest payments will be $10,000. To find your annual percentage rate, divide the interest amount by the original loan amount, multiply it by 365, and then divide that number by the number of days in the loan term. In this example, assuming a six-month term, your APR would be about 40%.
For more information about interest rates:
To better understand the unique needs of your business, we'll begin by completing a short survey.
Once you find your perfect match, our team will be happy to guide you through the next steps of the process.
Understanding the results
Putting this information into a calculator gives us the following result:
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Monthly payment amount. The fixed amount repaid each month, including principal, interest, and fees.
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The total interest paid. The total amount a lender charges for a loan. Paying off a loan early can potentially save you money on interest, unless the lender charges a prepayment penalty.
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Total payment amount. The total of all payments you make on a loan, which is the amount borrowed plus interest and fees.
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Amortization schedule. This schedule shows how much of your monthly (or yearly) payment goes toward principal and how much goes toward interest. As you pay off your loan over time, your monthly payment stays the same, but you pay less interest and more of your payment goes toward principal.
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SBA loans. The Small Business Administration works with banks and other financial institutions to offer small business loans with low interest rates and long repayment terms, but SBA loans can take a long time to disburse and can be difficult to obtain.
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Long term loan. Term loans typically have terms ranging from 3 to 18 months for short-term loans and up to 10 years or more for long-term loans. Loans can be used for a variety of purposes, including working capital.
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Credit line. A business line of credit gives you flexible access to cash. You are approved for a specific amount of credit and can draw from the line as needed. You only make payments on the amount you use and pay interest.
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Equipment financing. Equipment financing is used to purchase equipment. Lenders will often loan up to 100% of the equipment's value. These loans are self-secured, meaning the equipment itself serves as collateral for the loan.
Other Business Loan Calculators:
Alternative ways to fund your business
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Invoice Factoring It is the process of selling unpaid customer invoices to a factoring company, who then collects payment from the customer.
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Invoice Finance is an alternative that allows you to use unpaid invoices as collateral for a cash advance. You still collect invoice payments from your customers and then repay the loan. This method gives you more control over the invoicing process.
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Personal Loans This may be an option for new businesses that can't get traditional financing. Lenders consider your personal credit score and income, not your business history.
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business credit card They can also be easier to obtain than small business loans, but business credit cards tend to have lower credit limits but can earn you rewards like cash back and travel points.
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Business Subsidy They provide free funding to start-ups and existing businesses, either as a lump sum or to reimburse certain expenses. They can be difficult to research and apply for, and grant amounts are usually not as high as loans, but getting even a small amount of free business capital can be worth it.
Finding the Right Business Loan
FAQ
Business loan terms can range from as short as three months to as long as 10 years or more. To qualify for a long-term business loan, you’ll probably need to have an established business with strong financial standing.
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Some business loans are paid monthly, but some are paid weekly or daily. Bank loans and SBA loans are usually paid monthly, while short-term online products (lines of credit, merchant cash advances, etc.) are more likely to be paid daily or weekly.
