Business Loan Calculator

Calculate monthly payment, total interest, and amortization schedule for any business loan.
Includes DSCR check, rate comparison, and SBA loan guidance.

Monthly payment · Total interest · Amortization schedule · DSCR check
Business Loan Calculator
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Enter business NOI to check if you qualify (lenders want DSCR ≥ 1.25)
SBA Loan Types & Typical Rates (2025–2026)
Loan TypeMax AmountTermRate RangeBest For
SBA 7(a) Standard$5M10–25 yr10.5–14.5%Working capital, equipment, real estate
SBA 7(a) Small$500KUp to 10 yr11–15%Smaller businesses, faster approval
SBA 504$5.5M10–25 yr6–8% (fixed)Commercial real estate, heavy equipment
SBA Microloan$50KUp to 6 yr8–13%Startups, very small businesses
Conventional Bank Loan$5M+1–20 yr7–13%Established businesses, strong credit
Online Business Loan$500K3 mo–5 yr8–30%+Fast funding, lower credit threshold
Business Line of Credit$250KRevolvingPrime+1–5%Working capital, cash flow management

Rates as of 2025. SBA 7(a) rates = Prime + spread; Prime Rate was 7.5% in 2025. Actual rates depend on creditworthiness, collateral, and lender.

Business Loan Basics: What Every Borrower Should Know

A business loan is an amortized installment loan in most cases. Each monthly payment covers accrued interest first, then principal. Early payments are mostly interest; later payments are mostly principal.

The PMT formula

Monthly Payment = P × r(1+r)ⁿ ÷ [(1+r)ⁿ − 1]
where P = principal, r = monthly rate (APR ÷ 12), n = total months.

DSCR — the most important qualifier

Debt Service Coverage Ratio = Annual NOI ÷ Annual Debt Service. Most lenders require DSCR ≥ 1.25. If your business earns $100,000 NOI and the loan costs $75,000/year in payments, your DSCR is 1.33 — you qualify. Below 1.0 means the business can't cover its loan payments.

APR vs interest rate

The stated rate is just the interest cost. APR adds origination fees, guarantee fees, and other costs amortized over the loan term. Always compare APR between lenders — a lower rate with a 3% origination fee can be more expensive than a slightly higher rate with no fees.

Related: Break-Even Calculator · Profit Margin Calculator · Employee Cost Calculator

FAQ

Business loan questions answered

How is my monthly payment calculated?
Monthly Payment = P × r(1+r)ⁿ ÷ [(1+r)ⁿ − 1]. P = principal, r = monthly interest rate (APR÷12), n = number of monthly payments. Early payments are mostly interest; as you pay down principal, the interest portion shrinks each month.
What is DSCR and why does it matter?
DSCR = Net Operating Income ÷ Annual Debt Service. Most lenders require 1.25+. It means for every $1 in loan payments, the business earns $1.25 — a 25% safety buffer. Below 1.0 means you can't cover the loan from operations.
What is a good interest rate for a business loan?
SBA 504 loans currently run 6–8% (fixed) — the best available rates. SBA 7(a): 10.5–14.5%. Strong businesses with 700+ credit score and 2+ years history typically qualify for bank rates of 7–11%. Online lenders charge more: 8–30%+.
Is business loan interest tax deductible?
Yes — for a loan used for legitimate business purposes, the interest expense is generally tax deductible as a business expense. This reduces your effective borrowing cost. A 10% loan with a 25% tax rate has an effective after-tax cost of 7.5%.