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Business Loan Calculator - Free Business Calculator | ASK SMB
AskSMB.io
Financial

Business Loan Calculator

Calculate monthly loan payments, total interest, and understand your business loan costs

$

Total amount you plan to borrow

%

Interest rate charged by the lender per year

Duration of the loan in years

How often you will make loan payments

Invalid Input

Loan amount must be greater than zero

Monthly Payment

$0

Amount you'll pay each month

Total Payment

$0

Total amount you'll repay over the loan term

Total Interest Paid

$0

Total interest cost over the life of the loan

Payment Breakdown

Principal (Loan Amount)0%
Interest (Cost)0%

Total Loan Cost Breakdown

How the Business Loan Calculator Works

Business loan calculators help you understand the true cost of borrowing. By calculating your monthly payment, total payment, and total interest, you can make informed decisions about loan terms and compare offers from different lenders. Understanding amortization shows how your payments are split between principal and interest over time.

Formula

Monthly Payment = P × [r(1+r)^n] / [(1+r)^n - 1]

Where:

  • P=Principal (loan amount borrowed)
  • r=Periodic interest rate (annual rate ÷ 12 for monthly)
  • n=Total number of payments (years × 12 for monthly)

Example: Small Business Loan

Loan Amount:$50,000
Interest Rate:8% annual
Loan Term:5 years
Payment Frequency:Monthly

Monthly Payment = $50,000 × [0.00667(1.00667)^60] / [(1.00667)^60 - 1] Monthly Payment ≈ $1,014 Total Payment = $1,014 × 60 = $60,840 Total Interest = $60,840 - $50,000 = $10,840

Result:$1,014/month | $10,840 total interest

Tips & Best Practices

  • •Compare rates from multiple lenders - even 1% difference saves thousands over time
  • •Shorter loan terms have higher monthly payments but save significantly on interest
  • •Improve your credit score before applying to qualify for better rates
  • •Make extra principal payments when possible to reduce total interest
  • •Business loan interest is typically tax-deductible as a business expense
  • •Secured loans (with collateral) usually offer lower rates than unsecured loans
  • •Consider your cash flow carefully - ensure you can comfortably afford payments
  • •Check for prepayment penalties before signing - some lenders charge fees for early payoff
  • •Shop around with banks, credit unions, and online lenders for the best terms
  • •Factor in all costs including origination fees, not just the interest rate

Frequently Asked Questions

Loan payments are calculated using an amortization formula that considers your loan amount (principal), interest rate, and loan term. Each payment covers both interest and principal. Early payments are mostly interest, while later payments pay down more principal. The formula ensures you pay off the loan completely by the end of the term.

Related Tools

💡 Quick Tips

  • •All calculations happen in your browser - your data is private
  • •Results update in real-time as you type
  • •Export to PDF or share via link
  • •No sign-up required

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