Business Loan Calculator
Enter the amount, rate, term and fee. A $100,000 loan at 9 percent over 5 years has a payment of $2,075.84 on a monthly schedule.
How the business loan calculator works
A term loan is repaid in equal installments. The calculator works out the payment for the frequency you choose, the total interest over the life of the loan, the origination fee and the annual debt service, which is the total you pay each year. Lenders and the DSCR ratio use that last figure to judge whether the business can carry the debt.
The formulas
Here i is the rate divided by the payments per year and N is the total number of payments. Example: A $100,000 loan at 9 percent over 5 years has a payment of $2,075.84 across 60. Total interest is $24,550.13. A 2 percent fee adds $2,000.00, so the total cost is $26,550.13, and annual debt service is $24,910.03. Figures are illustrations.
Using the result
Compare the annual debt service with your yearly net operating income. If income is not comfortably above it, the lender may decline or ask for collateral, and you may struggle to repay. Our DSCR loan calculator measures that coverage directly. For government-backed options see the SBA loan calculator, and the SBA lists its loan programs on its site. Real offers can include other fees, variable rates or balloon payments that this simple tool does not model, so read the loan agreement.
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Frequently asked questions
How do I calculate a business loan payment?
Use payment = loan x i / (1 – (1 + i)^-N), with i the rate per period and N the number of payments. The default loan gives $2,075.84 per period.
What is annual debt service?
The total of all loan payments made in a year. For the default loan it is $24,910.03.
Does a weekly schedule cost less?
Payments are smaller but more frequent. With the same rate and term, total interest changes only slightly, and some lenders quote factor rates instead of APR.
Is the origination fee part of the rate?
No. It is a separate cost. The calculator adds it to the total cost of the loan.
Is this a loan offer?
No. It is an estimate for planning. Actual terms depend on the lender and your credit.
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