Estimate your business loan payment, total interest, and total cost, and see how fees, interest-only time, a balloon, and extra payments change the outcome. You can also compare the stated interest rate to an estimated effective APR based on the cash you actually receive.
Advanced options
| Payment # | Payment | Interest | Principal | Balance |
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How to use our Business Loan Calculator
- Enter the loan amount (the principal you are borrowing).
- Enter the annual interest rate (percent). This is the rate used to compute interest each period.
- Enter the loan term in months (how long the loan lasts if you make the scheduled payments).
- Choose a repayment type: Fully amortizing, Interest-only (then amortizing), or Balloon (you still owe a lump sum at the end).
- Choose the payment frequency (monthly is most common).
- Open Advanced options if you need fees, an interest-only period, a balloon amount, extra payments, or a different day-count basis.
- If adding fees, choose how you are entering them and whether they are deducted from proceeds (you receive less cash) or paid out-of-pocket (you pay fees separately).
- Click Calculate to see the scheduled payment, total interest, total fees, total paid, net cash received, and an amortization schedule preview.
Definitions
Principal: The amount you borrow at the start (the loan amount).
Interest: The cost of borrowing money, calculated each payment period using the interest rate.
Annual interest rate: The yearly rate used to compute interest (for example, 10% per year).
APR (annual percentage rate): A rate meant to reflect the cost of borrowing over a year, often including certain fees. APR rules are defined for many consumer loans, but business-purpose loans may be treated differently. [1]
Amortization: Paying a loan down over time with a schedule that splits each payment into interest and principal.
Upfront fees: One-time charges paid at closing, like origination or documentation fees.
Net proceeds: The cash you actually receive at the start after any fees deducted from the loan disbursement.
Interest-only period: A set number of payments where you pay interest but do not pay down principal (unless you add extra payments).
Balloon payment: A lump sum still owed at the end of the term.
Methodology
Inputs used
This calculator models a fixed-rate term loan with a payment schedule based on your payment frequency. It can include an interest-only phase, a balloon amount due at the end, upfront fees, and optional extra payments.
Convert annual rate to a per-period rate
rate_per_period = (annual_rate_percent/100) / periods_per_year
Periods per year is 12 for monthly, 52 for weekly, and 365 (or 360 if you choose 30/360) for daily. The day-count basis affects the daily rate conversion and is a common business-loan detail.
Upfront fees and net proceeds
First compute total upfront fees from your selected input method (percent, dollars, or both). Then compute the net cash you receive at the start.
net_proceeds = loan_amount - upfront_fees_total (if deducted from proceeds) else loan_amount
If fees are deducted from proceeds, you may owe payments based on the full loan amount even though you received less cash up front. If fees are paid out-of-pocket, they are still a cost but do not reduce the loan proceeds in this model.
Scheduled payments
If there is an interest-only period, the calculator uses two phases: (1) interest-only payments for the chosen number of months (monthly frequency only), then (2) a fully amortizing phase that pays the remaining balance down to the target final balance (0 or the balloon amount) by the end of the term.
io_payment = balance * rate_per_period
payment = P * r / (1 - (1 + r)^(-n))
payment = (P - FV/(1+r)^n) * r / (1 - (1+r)^(-n))
In these formulas, P is the balance at the start of the amortizing phase, r is the per-period rate, n is the number of amortizing payments, and FV is the balloon amount due at the end. If r is 0, the payment becomes straight-line principal repayment.
Amortization per payment (schedule math)
For each payment period, interest is computed from the prior balance, then the rest of the payment reduces principal. Extra payments (if enabled) are added to the scheduled payment starting at your chosen payment number, and the last payment is reduced if needed so the balance does not go below the final target (0 or the balloon amount).
interest_i = balance_{i-1} * r; principal_i = payment_i - interest_i; balance_i = balance_{i-1} - principal_i
Totals shown in results
Total interest is the sum of all per-period interest amounts. Total paid includes all scheduled payments plus any extra payments, plus upfront fees (whether deducted from proceeds or paid out-of-pocket). Total cost (interest + upfront fees) is shown as a simple cost-of-borrowing number.
Estimated effective APR (fee-adjusted comparison)
The estimated effective APR is an APR-like comparison rate based on the cash you receive (net proceeds) and the payments you make. It solves for a per-period rate that discounts the payment stream back to the net proceeds, then annualizes that rate. APR concepts are defined in Regulation Z for many consumer loans, but business loans may be disclosed differently. [1] SBA programs can also have specific rules and fees, so always confirm how a lender defines and charges fees. [2]
Find r_eff such that: net_proceeds = sum_{i=1..N} payment_i / (1 + r_eff)^i ; then APR_eff = r_eff * periods_per_year * 100
The calculator uses a safe numeric search (bisection) with bounds and an iteration limit. If net proceeds is less than or equal to 0 (for example, fees deducted from proceeds are as large as the loan amount), the effective APR cannot be computed and is shown as N/A.
Validation and edge cases
The calculator blocks empty or non-numeric required rates, non-positive terms, negative fees, negative extra payments, interest-only months that leave no amortizing payments, and balloon amounts that are negative or larger than the balance that would exist at the start of the amortizing phase. Money outputs are rounded to cents for display, while internal math keeps full precision and adjusts the final payment to hit the target balance within about 1 cent.