How to Use This Calculator
- 1
Enter Your Loan Details
Input the loan amount (e.g., $100,000), annual percentage rate (e.g., 7.5%), and loan term (e.g., 5 years). Select whether the term is in years or months.
- 2
Review Your Results
Examine the monthly payment, total interest, and total cost. Scroll down for a detailed amortization schedule and chart showing how your balance decreases over time.
Example Calculation
A small business owner borrows $100,000 at 7.5% APR for 5 years to purchase new equipment.
Loan Amount
$100,000
Annual Percentage Rate (APR)
7.5%
Loan Term
5 years
Results
Monthly Payment
$2,003.79
Total Interest
$20,227.69
Total Cost
$120,227.69
Tips
Compare Loan Offers by Total Interest
A 0.5% rate difference matters more than you think. On a $100,000 loan over 5 years, dropping from 7.5% to 7.0% APR saves $1,421 in total interest -- run both scenarios to see the difference.
Shorten Your Term to Save Thousands
Reducing a $100,000 loan at 7.5% from 5 years to 4 years saves $4,169 in interest, though your monthly payment rises by $414. Use the calculator to find a term that balances savings and cash flow.
Factor in Extra Payments
Adding $100 per month to a $100,000 loan at 7.5% over 5 years pays it off 3 months early and saves $1,196 in interest. Check if your loan allows prepayment without penalty before committing.
Account for Fees Beyond APR
APR captures interest but not all costs. Origination fees (1-3%), SBA guarantee fees (0.25-3.75%), and closing costs add up. Factor these into your total borrowing cost separately.
The Business Loan Calculator helps entrepreneurs and established companies estimate monthly loan payments, total interest costs, and visualize a complete amortization schedule.
Whether you are financing equipment, real estate, or working capital, this tool lets you compare scenarios and plan repayments with precision -- essential for sound financial planning in 2026.
How Business Loan Payments Are Calculated
The calculator uses the standard amortization formula to determine your fixed monthly payment:
M = P * i / (1 - (1 + i)^-n)
Where P is the principal loan amount, i is the monthly interest rate (annual APR divided by 12), and n is the total number of payments.
For a $100,000 loan at 7.5% APR over 5 years: i = 0.075 / 12 = 0.00625, n = 60, giving M = $2,003.79 per month.
| Metric | Value |
|---|---|
| Monthly Payment | $2,003.79 |
| Total Payments (60 months) | $120,227.69 |
| Total Interest | $20,227.69 |
| Interest-to-Principal Ratio | 20.2% |
Comparing Loan Scenarios
Small differences in rate or term have outsized effects on total cost.
The table below shows how a $100,000 loan performs under different conditions:
| Scenario | APR | Term | Monthly Payment | Total Interest |
|---|---|---|---|---|
| Base case | 7.5% | 5 years | $2,003.79 | $20,227.69 |
| Lower rate | 7.0% | 5 years | $1,980.12 | $18,807.19 |
| Shorter term | 7.5% | 4 years | $2,417.89 | $16,058.73 |
Dropping the rate by 0.5% saves $1,421 in interest.
Shortening the term by one year saves $4,169 but increases the monthly payment by $414.
Use the calculator to find the combination that fits your business cash flow.
Understanding Amortization in 2026
Amortization ensures predictable payments, but the interest-to-principal split shifts dramatically over the loan's life.
On a $100,000 loan at 8% over 10 years, roughly 53% of first-year payments go toward interest.
By the final year, nearly all of each payment reduces principal.
In 2026, small business term loans commonly feature repayment periods of 5 to 10 years, with APRs between 6% and 13% for well-qualified borrowers.
SBA 7(a) loans offer competitive rates with terms up to 25 years for real estate.
Understanding amortization helps you anticipate when your equity in financed assets accelerates -- typically in the second half of the loan term.
Frequently Asked Questions
What types of business loans can this calculator handle?
This calculator works for any fixed-rate business loan with regular monthly payments, including SBA loans, term loans, equipment financing, and commercial real estate loans. It uses standard amortization to calculate monthly payments, total interest, and total cost.
What is the difference between APR and interest rate?
The APR (Annual Percentage Rate) includes both the interest rate and any additional fees or costs associated with the loan, expressed as a yearly rate. The interest rate is just the cost of borrowing the principal. APR gives a more complete picture of the true cost of the loan.
How do I read the amortization table?
The amortization table shows month-by-month details of your loan repayment. Each row displays the remaining balance, cumulative interest paid, and total amount paid to date. Early payments are mostly interest, while later payments are mostly principal.
Can I use this for a business line of credit?
This calculator is designed for fixed-term loans with regular payments. A business line of credit has variable balances and typically interest-only payments on the drawn amount, so a dedicated line of credit calculator would be more appropriate.