💼 Business Loan Calculator
Calculate your business loan payments, total interest costs, and amortization schedule
| Year | Principal Paid | Interest Paid | Remaining Balance |
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📊 How Business Loan Calculations Work
Business loan calculations use the standard amortization formula to determine your monthly payments and how they're allocated between principal and interest over the life of the loan.
The formula used to calculate your monthly payment is:
Where:
- M = Monthly payment
- P = Principal loan amount
- r = Monthly interest rate (annual rate divided by 12)
- n = Total number of payments (loan term in years multiplied by 12)
Business loans typically have slightly different characteristics than personal loans:
- Term Loans: Fixed amounts with regular payments over a set period
- SBA Loans: Government-backed loans often with favorable terms
- Equipment Financing: Secured by the equipment being purchased
- Commercial Real Estate: Longer terms, often with balloon payments
- Lines of Credit: Revolving credit with variable payments
Understanding your amortization schedule helps you see how much of each payment goes toward principal reduction versus interest costs, which is particularly important for business tax planning.
This calculator works for most fixed-rate business loans including term loans, SBA loans, equipment financing, and commercial real estate loans. It's designed for amortizing loans with fixed monthly payments. Lines of credit with variable rates would require a different calculation approach.
Longer loan terms result in lower monthly payments but higher total interest costs over the life of the loan. Shorter terms have higher monthly payments but lower overall interest costs. For business loans, it's important to balance affordability with total cost to maximize your return on investment.
Lenders consider business credit score, time in business, annual revenue, profitability, industry risk, collateral, and the owner's personal credit history. Stronger financials typically qualify for lower interest rates. Established businesses with consistent revenue and good credit can often secure rates 2-4% lower than newer businesses.
Fixed rates provide payment stability and are easier to budget for, making them ideal for long-term investments. Variable rates may start lower but can increase over time, adding uncertainty to your financial planning. Most businesses prefer fixed rates for term loans to maintain predictable expenses.
Most lenders will loan up to 10-30% of your annual revenue, depending on your industry, profitability, and creditworthiness. For SBA loans, maximum amounts typically range from $350,000 to $5 million. Equipment financing may cover 80-100% of the equipment value. It's best to speak with multiple lenders to understand your specific borrowing capacity.