Business Loan Calculator (Free Online Tool)

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Business Loan Calculator

When you are planning to build a new business, buying the related equipment, or anything to keep up with your current expenses, you probably need to be funded for the capital. Today you can easily avail specific financing options for your business.

Various lenders, especially today’s online alternative companies, can quickly lend you money for your business provided you fulfill a few requirements.

However, the main problem might be the cost of borrowing. Typically, business loan amounts are huge in their limit, and they might come with relatively high-interest rates, due to which they are risky in nature.

Sometimes it can be difficult for a business owner to pay the monthly installments. So it is better to calculate your monthly payments before getting the loan: for that purpose, our Business Loan Calculator can be tremendously helpful, because it is built to cover every costs involved.

Business loans in a nutshell

Generally, business loans can be of two types, which will influence greatly their costs: long-term (5+ years) or short-term loans (6 months- 3years). The former type will usually require monthly payments, while some lenders charge interest on a weekly or even daily basis for the latter.

Most people prefer a monthly payment schedule to take the loan. Your monthly installments will depend on the loan amount, interest rate, and a set of fees that may be applied.

Factors affecting a business loan monthly installment

  • Loan amount: the greater this amount, the higher the interest that will be charged.
  • Interest rate: the interest depends on your credit score, your income, and the financial status of your business. We use APR because lenders will make their offers disclosing their APRs, that compound of interest plus most of the fees related to the service.
  • Loan term: the loan tenure has of course the maximum impact on the amount of your repayments. The more time you have to repay the loan, the lesser you will pay monthly.

How to use the business loan calculator

Business Loan Calculator
Business Loan Calculator

Our calculator will help you to plan your monthly budget alongside with your expenditures.

It can help you get a precise estimation of the amount you need to pay monthly: it is crucial that you have an idea of your borrowing costs, before you take action.

All you had to do is enter the necessary information, known or assumed.

After inputting your desired loan amount, the next thing is the down payment. Many lender will ask to disburse a percentage of the sum you want to borrow, as a warranty that you are serious about repaying.

Nearly all the times, you will know your APR before applying to a business loan. Or else, you can select one that you are comfortable with, seeing how it affects your future payments, then finding a lender that can offer you something close to that rate.

Here you can see how the repayments will look like based on which frequency you want to make them, or the schedule you are given.

Then, select your wanted/assigned term, or you can play with different terms, until you find the most feasible repayment routine for you.

The origination fee is charged by lenders to compensate the work necessary for just generating the service. Some of them will declare the fee amount, which is usually a percentage of what you are borrowing. The fee can be paid upfront or just deducted from the funds you’ll receive, but regardless of this, it will be a relevant cost.

Note: if you made any changes to the inputs after hitting “Calculate” you will have to click on it again to see the new calculations.

Lastly, in the table, you will see which portion of your monthly payments goes toward principal and interest, and how the balance reduces over time. This is key information about your loan affordability.

Advantages of Using our Business Loan Calculator

  • Accurate results: entering all the parameters of a business loan, nothing will be left behind. Some lenders require a down payment to be made, and most will likely charge an origination fee, that noticeably adds up to your loan cost: this tool takes account of these things, so there won’t be surprises.
  • Planning your budget:knowing in advance how much you need to pay every month can be a life-saver. Moreover, you have even the chance to check your future weekly or daily payments. See the amortization table to see where you will stand at a certain date over time.
  • Evaluating various loan offers: you can either assume a desired rate and term or input the ones that are offered to you after pre-qualifying from a lender. Also, you can compare closely two plans, which turns to be useful when shopping from different lending companies. 
  • Making financial framework: doing a business is quite risky, and there is no way to find out what will happen in the future. Our calculator is a handy tool that will always be at your side.

Frequently Asked Questions

How much am I granted on business financing?

It depends on the lender of choice: some can fund you with as little as $500, other will start from a minimum of $1,000 or $2,000, while you can usually take up to $5 millions. Loans from SBA (Small Business Administration) have no minimum limits set on their programs, and for eligible cases, they can go as far as $20 millions. How much you will be able to borrow will ultimately be based on your current or prospected revenue, source of incomes (better if it’s steady), nature and duration of the business, your credit score and history.

How long does a business loan last?

A conventional loan from a bank institution comes with an average term of 5 years, but widely, you will see terms ranging from 3 months up to 25 years, if you also consider dedicated lending companies and SBA loans. These latter have the longer periods of repayments, but also stricter requirements. The longer your desired term, the better your financial status must be to qualify for that term.

What are business loans rates?

The rates you can get will widely vary basing on several factors: your credit score, age and industry of your business, annual revenue, term of the loan, among the most relevant. The overall range is anything between roughly 4% and 100%, with some kind of loans (such as invoice factoring) greatly exceeding  this maximum. You will find the most affordable rates in SBA 7(a) loans: they are pre-set , but again you must demonstrate that you can qualify for them.

Deciding among a plethora of business loan providers? Check out our selection of top-rated lenders in the market, where we explain why they have to be chosen: find the one that can meet your goals at best.

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