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Business Loan Calculator
Calculate monthly payments and interest costs based on your loan amount, loan term and APR.
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Ryan Brady is a CFP® professional and lead writer at NerdWallet covering small-business lending and insurance. Ryan enjoys simplifying complex finance topics to help entrepreneurs make smarter decisions.
Before joining NerdWallet, Ryan ran a successful online retail business, giving him firsthand knowledge of the challenges and opportunities small-business owners face.
His work has appeared in TechCrunch, MarketWatch, Yahoo, Nasdaq and more.
Sally Lauckner is an editor on NerdWallet's small-business team. She has more than a decade of experience in online and print journalism. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content and specializing in business financing. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She is based in New York City.
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured in The Washington Post, The Associated Press, MarketWatch and Nasdaq, among other publications. She has also hosted a webinar as part of the SBA's 2024 National Small Business Week Virtual Summit. Randa is passionate about helping small-business owners make educated financial decisions, especially when it comes to affordable funding. She is based in New York City.
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Estimate payments to understand the cost of a business loan
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How to use the business loan calculator
NerdWallet’s business loan calculator shows you the true cost of a small-business loan . It breaks down the monthly payments and total amount of principal and interest you’ll pay over the life of a loan.
Play around with the numbers to see how different terms and rates change your results.
Step 1. Enter your loan details
Here’s what you’ll enter:
Loan amount. The total amount you plan to borrow. If the loan requires a down payment, subtract it before entering the loan amount.
Loan term. The number of months it’ll take to pay the loan back. For example, a 24-month term means you’ll make 24 payments over two years.
Annual percentage rate (APR). The yearly cost of borrowing money, including interest rate and fees. If you don’t know the loan’s APR, you can enter the interest rate here or use average business loan rates for a quick estimate. If your lender gives a factor rate instead, see our factor rate to APR calculator below.
Factor rates are expressed as a decimal, as opposed to a percentage. Use our factor rate to APR calculator below to help you find the APR of a merchant cash advance or short-term loan that uses a factor rate.
We’ll start with a brief questionnaire to better understand the
unique needs of your business.
Once we uncover your personalized matches, our team will consult you
on the process moving forward.
🤓
Nerdy Tip
Not sure what to plug into our calculator? Use NerdWallet’s best small-business loans to find real-world interest rates, term lengths and loan amounts to help you ballpark loan payments and costs.
Step 2. Review your payment breakdown
Once you hit “calculate,” our tool will show the following:
Monthly payment. The amount you’ll repay each month. It includes principal, interest and fees.
Total principal. The original amount you borrowed.
Total interest. The total amount you’ll pay your lender in interest costs over the life of the loan. If you repay the loan early, you might be able to save on interest — just keep in mind that some lenders charge a prepayment penalty .
Total principal & interest. The sum of all payments made on the loan, including the amount you borrowed, plus interest and fees.
Amortization schedule. This shows how much of your payments will go toward principal and how much will go toward interest each month. As you continue to repay your loan over time, your monthly payment will remain the same, but interest payments will get smaller and more of your payment will go toward your principal.
Now that you have some numbers in front of you, you can use them to:
See if the payments fits your budget
Here are some questions to ask yourself as you consider whether or not you can afford a loan:
Is my business's monthly cash flow enough to comfortably (and consistently) cover these estimated payments?
Would I feel comfortable setting up automatic payments for the monthly amount of this loan?
If you answered “no” to either of these questions, you may want to consider a different type of loan or even an alternative way to finance your business.
Compare lenders
Once you know the estimated costs of a loan, you can use our calculator to plug in loan terms and APRs from competing lenders to find the least expensive loan for you. Just keep the following in mind:
Consider total interest cost, not only the monthly payment. A lower monthly payment may mean more interest paid over the life of the loan, so compare both monthly payments and the total interest cost.
Weigh additional factors. As you compare options, consider prepayment penalties and other hidden fees, how often you have to make payments, how fast the lender can provide funding and whether your lender allows you to adjust payments if you face hard times.
Payments on most small-business loans are calculated based on the loan amount, the annual interest rate, the repayment term and payment frequency. Fees and any required down payment can also affect payments on a loan.
It largely depends on your qualifications. Generally, lenders offer larger loan amounts to borrowers with strong credit, steady revenue and longer business history.
The type of loan and lender you go with also play a role. For example, microloans usually top out around $50,000, while an SBA 7(a) loan can reach up to $5 million. If you’re looking to borrow a lot, check out NerdWallet’s list of the best large business loans .
A business loan term can be as short as three months and as long as 25 years or more. To qualify for a long-term business loan, you’ll likely need to have an established business with strong finances.
Online lenders typically charge business loan rates from 14% to 99% APR. You’ll likely find the lowest rates from bank or SBA loans. Bank loans, on average, range from 6.37% to 10.98% , and variable SBA loans range from 9.75% to 13.25% .
Some business loans have monthly payments — although others will require weekly or daily payments. Bank and SBA loans are typically repaid on a monthly basis, whereas short-term online loans (e.g. lines of credit, merchant cash advances) are more likely to be repaid daily or weekly.
“Before you borrow” checklist
Using borrowed cash can be a boon for your business. But if things don’t pan out, your collateral, business and even personal finances can be on the line.
Before you borrow, make sure:
✅Your revenue is stable or predictable.
✅You understand total repayment costs and loan terms.
✅You’ve shopped around with multiple lenders.
✅You have a clear purpose and plan to pay back the loan.
✅You have a backup plan if cash flow gets tight, like a cash cushion or liquid assets.
✅You’ve considered other funding options ( see below ).
When in doubt, check with a financial professional, like an accountant or financial advisor, to help you decide if a loan makes sense for your business. You can also access free or low-cost business coaching through organizations like SCORE .
SBA loans. The United States Small Business Administration works with banks and other lenders to offer small-business loans with low interest rates and long repayment terms. However, SBA loans are slow to fund and can be hard to qualify for.
Term loans. Term loans typically range from three to 24 months for a short-term loan and up to 10 years or longer for a long-term loan . They can be used for a variety of purposes, including working capital.
Lines of credit. A business line of credit provides flexible access to cash. You get approved for a specific amount of credit and can draw from your line as needed. You only make payments and pay interest on the money you use.
Equipment financing. Equipment financing is used to buy equipment. Lenders often finance up to the full cost of the equipment. With these loans, the equipment itself serves as collateral.
Commercial real estate loan. A commercial real estate loan is used to buy, build, refinance or renovate a commercial property, like a warehouse, office building or retail store. Standard commercial real estate loans work a lot like a personal mortgage, but tend to have shorter repayment terms and higher upfront costs.
Where to get a business loan
Banks and credit unionsOffer the lowest rates, but are typically slow to fund and hard to qualify for.
Online lendersOffer fast cash and have flexible requirements, but expect high interest rates.
Community development financial institutionsTend to have low interest rates and are easy to qualify for, but can be slow to fund.
Business grants provide free money to startups and established businesses — either by giving you a lump sum, or reimbursing you for certain expenses. They can be difficult to research and apply for, and grant amounts typically aren’t as high as loans.
Friends and family
Consider if: You have trusted family members or friends willing to lend you cash.
Getting a business loan from family or friends can be a flexible and cheap way to get funding, but you’ll want to put everything in writing to avoid misunderstandings or strained relationships.
Personal business loans
Consider if: Your business is newer.
Personal business loans might be a good option if your business can’t qualify for traditional financing. Lenders consider your personal credit score and income instead of your business history.
Business credit cards
Consider if: You need to cover smaller, daily expenses.
Business credit cards can be easier to get than a small-business loan. They tend to have relatively low credit limits, but you can earn rewards for your spending, such as cash back or travel points.
Invoice factoring or financing
Consider if: You have a B2B company.
Invoice factoring and invoice financing both involve the use of unpaid customer invoices to access capital. With factoring, you sell the invoices to a factoring company that then collects the money from your customers. With invoice financing, the unpaid invoices serve as collateral on a cash advance. You collect payment on the invoices from your customers, and then you pay back the loan.
