Estimate payments to understand the cost of a business loan
Over the course of the loan, expect to pay
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Payment breakdown
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| Payment date | Principal | Interest | Balance |
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| Today | $0 | $0 | $0.00 |
Get personalized small-business loan rates to compare
How to use the business loan calculator
NerdWallet’s business loan calculator estimates monthly payments and the total amount of principal and interest you’ll pay over the life of a small-business loan. Play around with the numbers to see how different terms change your results.
Step 1. Enter your information
Here’s what you’ll enter:
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Loan amount. The total amount you plan to borrow.
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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.
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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 instead. If your lender gives a factor rate, you can calculate your interest rate by multiplying the factor rate by your total loan amount (see our example below).
How to calculate interest rate using a factor rate
Factor rates are expressed as a decimal, as opposed to a percentage. Multiply the factor rate by your loan amount to determine the total amount you’ll owe your lender.
Here’s the two-part formula:
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Calculate total interest: (Loan Amount × Factor Rate) − Loan Amount
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Calculate interest rate: ((Total Interest / Loan Amount) × (365 / Loan Term in Days)) × 100
If you have a $50,000 loan with a 1.2 factor rate, for example, you’ll owe a total of $60,000 ($50,000 x 1.2), meaning the total interest you pay would be $10,000. To get the annualized rate, divide the amount of interest by the original loan amount, multiply it by 365 days and then divide that number by the number of days in your loan term. In this example assuming a six-month term, the interest rate would come out to about 40%. You would then enter that into our calculator.
For more details on converting a factor rate into an interest rate, follow the steps in our factor rate guide.
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.
2. Calculate your results
Once you hit “calculate,” our tool will show the following:
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Monthly payment. The amount you’ll repay each month. It includes principal, interest and fees.
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Total interest paid. 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 — if your lender doesn’t charge a prepayment penalty.
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Total payments. The sum of all payments made on the loan, including the amount you borrowed, plus interest and fees.
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Amortization schedule. This shows how much of your monthly payments will go toward your principal and how much will go toward interest. 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.
Frequently asked questions
What should I do with my results?
Now that you have some numbers in front of you, you can use them to:
Here are some questions to ask yourself as you consider whether or not you can afford a loan:
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Is my business’s monthly cash flow enough to comfortably (and consistently) cover these estimated payments?
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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.
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:
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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.
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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.
How big of a business loan can I get?
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.
How long is a typical small-business loan?
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.
What are typical interest rates for small-business loans?
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 6.7% to 11.5%, and variable SBA loans range from 10.25% to 13.75%.
Do you pay back a business loan monthly?
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.
Explore more business loan calculators
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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.
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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.
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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.
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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.
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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 take a while to fund.
Alternative ways to finance your business
Consider if: you don’t need a lot of money.
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.
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.
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.
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 and 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.
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