Published 2025-12-18 · Last updated 2026-02-05 · Reviewed by Valzura Editorial Team
Business Loan Calculator
Size the payment on the debt behind an acquisition, expansion, or refinance.
A business loan calculator estimates the monthly payment and total interest on a fixed-rate term loan used to buy, expand, or refinance a business. You enter the loan amount, the annual interest rate, and the term in years, and it applies the standard amortization formula to produce the payment, the total interest over the life of the loan, and a year-by-year payoff schedule. Business term loans commonly run 3 to 10 years, with rates that depend on credit, collateral, and whether the loan is bank or SBA backed.
The financed amount after your down payment.
Conventional term loans often run 7 to 12 percent.
Business term loans commonly run 3 to 10 years.
Monthly payment
$2,490.18
Total interest
$59,175
Over 84 payments.
Total repaid
$209,175
Amortization by year
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | $15,584 | $14,299 | $134,416 |
| 2 | $17,215 | $12,667 | $117,201 |
| 3 | $19,018 | $10,864 | $98,183 |
| 4 | $21,009 | $8,873 | $77,174 |
| 5 | $23,209 | $6,673 | $53,964 |
| 6 | $25,640 | $4,242 | $28,325 |
| 7 | $28,325 | $1,558 | $0 |
What drives your rate and term
A lender prices a business loan on the risk of the borrower and the collateral behind it. Credit history, time in business, cash flow, and whether the loan is secured all move the rate. The term is usually matched to the useful life of what you are financing: shorter for working capital and equipment, longer for an acquisition or real estate. A longer term lowers the monthly payment but, as the total-interest figure above shows, raises the lifetime cost.
How lenders size the loan
Lenders do not lend against the asking price alone. They work backward from cash flow: the business's net operating income must cover the annual debt payments with a cushion, typically a debt service coverage ratio of 1.25 or higher. If the payment from the calculator above pushes the ratio below that, the lender will ask for a larger down payment, a longer term, or a lower price.
Borrowing to buy a business
If the loan funds an acquisition, the government-backed SBA 7(a) program often offers longer terms and lower down payments than a conventional loan. Either way, confirm the price is fair before you sign. Our guide to buying and selling a business walks through diligence, and the free valuation calculator gives you an independent value to check the deal against.
Frequently Asked Questions
What is a typical interest rate on a business loan?
Rates vary widely by lender and borrower risk. Conventional bank term loans often range from roughly 7 to 12 percent, SBA 7(a) loans are tied to the prime rate plus a spread, and online lenders can run much higher. Your actual rate depends on credit, time in business, collateral, and the loan size.
How much can I borrow to buy a business?
Lenders size the loan to the cash flow of the business and your down payment, not just the asking price. They check that net operating income covers the debt payments with a cushion, usually a debt service coverage ratio of 1.25 or higher, before approving the amount.
What term should I choose for a business loan?
Match the term to the useful life of what you are financing. Working capital and equipment often use shorter terms of 3 to 7 years, while a business acquisition or real estate purchase can stretch to 10 years or more. A longer term lowers the payment but increases total interest.
Do business loan payments include principal and interest?
Yes. Each fixed payment on an amortizing term loan covers the interest due that period plus a portion of the principal. Over the term the principal is paid down to zero. The schedule above shows how much of each year's payments goes to principal versus interest.
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What Is Your Business Worth?
Borrowing to buy a business? Confirm the price is fair with a full valuation first.
Value My Business Free