Business Loan Calculator
See what a loan really costs — payment, total interest, and the true APR with fees included, the numbers the offer sheet leaves out.
Written by Dorothy Ibrahim, 10+ years in banking & finance
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How we calculate this
This calculator shows what a business loan really costs: the monthly payment, the total interest over the life of the loan, and the true APR once origination and other upfront fees are counted. The APR matters because two offers with the same sticker rate can cost very different amounts — fees reduce the cash you actually receive without reducing what you repay, and that gap is invisible unless you compute the annualized rate on the real cash flows.
The formulas
- Monthly payment
- principal × (monthly rate × (1 + monthly rate)^term) ÷ ((1 + monthly rate)^term − 1)Standard amortization; at a 0% rate the payment is simply principal ÷ term.
- Total interest
- sum of the interest portion of every scheduled payment
- Total cost
- total interest + all upfront fees
- Net proceeds
- loan amount − upfront fees (if fees are not financed); loan amount if fees are rolled into the balanceWhen fees are financed, the amortized principal becomes loan amount + fees instead.
- True APR
- the annualized rate that makes the net proceeds equal the present value of every payment (an internal-rate-of-return solve on the actual cash flows)With interest-only months or a balloon, the APR is solved on that exact payment stream.
- Extra-payment savings
- baseline total interest − total interest with the extra principal applied each month
Worked example
- Say you borrow $100,000 at a 10.5% annual rate over 60 months with no fees.
- The monthly payment is $2,149.39.
- Total interest over the 60 payments is $28,963.40 — about 29% of the amount borrowed.
- With no fees, the true APR equals the nominal rate: 10.50%.
- Now add a 6% origination fee deducted at closing: you receive only $94,000 but still repay the full $100,000 schedule, so the true APR jumps to about 13.22% — nearly 3 points above the quoted rate.
Rates, benchmarks & sources
- Payment, interest, and APR are computed from your own inputs — no market rates are assumed. — Standard amortization and internal-rate-of-return math (no external constants)
- APR comparison bands on the results bar — SBA 7(a) roughly 10–15%, bank term 8–15%, online term 15–35%, MCA/RBF 40–350% — are current-market rules of thumb, not quotes. — Industry rule of thumb (benchmarks.ts financingAprRanges)
Figures current as of 2026-07-02. See our methodology & editorial standards for how constants are versioned and verified.
What this tool doesn’t model
- This is an estimate for comparison, not an offer — your actual rate, fees, and approval depend on the lender's underwriting of your credit, revenue, and collateral.
- Assumes a fixed rate for the whole term; variable-rate loans will drift from this schedule as the index moves.
- The APR reflects the contractual schedule with no prepayment; if you use the extra-payment field, the interest savings are shown separately.
- Prepayment penalties, late fees, and covenants are not modeled — read the note on any balloon or interest-only structure carefully.
- Interest may be tax-deductible as a business expense, which this pre-tax comparison does not include.
Frequently asked questions
Why is the APR higher than the interest rate I was quoted?
Fees. An origination fee is either deducted from your proceeds or added to your balance, so you pay interest on money you never got to use. The APR re-solves the rate on the cash you actually received against the payments you actually make — that is the honest, comparable number. If the APR is more than about 2 points above the quoted rate, fees are doing real damage.
Should I roll the fees into the loan or pay them upfront?
Financing the fees preserves cash today but means you pay interest on the fee amount for the whole term, so the total cost is higher. Paying upfront reduces your net proceeds instead. The calculator models both — toggle the "roll fees into the loan" switch and compare the total cost and APR lines.
What does the balloon warning mean?
A balloon loan amortizes as if it ran the full term, but the entire remaining balance comes due in the balloon month. On the default $100,000 loan with a month-36 balloon, that final bill is about $48,496. If you also make extra monthly payments, the balance at the balloon month is lower — so the tool reports the smaller with-extra balloon (about $27,946 at $500/month extra) as the amount you would actually owe and names the $48,496 base-schedule figure alongside it, so the two never contradict. Owners who cannot refinance or pay it off at that point can lose the collateral, so the tool flags every balloon it computes.
How much do extra monthly payments actually help?
Every extra dollar goes straight to principal, which shrinks the balance that future interest is charged on. The effect compounds: the tool recomputes the full schedule with your extra payment and reports months saved and interest saved, so you can see whether, say, $500/month is worth more to you in the loan or in the business.
Is this the same as what a lender will offer me?
No — this tool computes the cost of terms you enter; it does not predict approval or pricing. Lenders underwrite your time in business, revenue, credit profile, and collateral, and the resulting offer can differ substantially from any calculator. Use this to compare offers you receive and to sanity-check the true cost before signing.
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themoneysheet provides educational estimates, not financial, tax, or legal advice. Figures use published rates and formulas current as of the date shown, but your situation may differ. Consult a qualified professional (CPA, attorney, or licensed advisor) before making financial decisions. Rates shown are estimates; actual offers depend on lender underwriting.