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Business Loan Calculator.

The payment, the real rate once fees are in, and whether the business actually covers the debt. Plus a cash advance in the same units.

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Business Loan

The payment, the real APR once the fees are in, and whether the business actually covers the debt. Plus what a merchant cash advance costs in the same units, so you can compare the two honestly.

Usually taken off the top, so you receive less than you borrow but repay all of it.

Profit before this loan's payments, plus depreciation. Lenders call it net operating income.

—Monthly Payment
—Interest & Fees
—Effective APR
—Debt Service Coverage

Compare it against a merchant cash advance

An advance is quoted as a factor rate, not a rate, and there is no APR on the paperwork. This converts it into the same units as the loan above. An advance is legally a purchase of future receivables rather than a loan in most states, so this is the equivalent APR if it were a loan — which is the comparison you need to make the decision.

1.35 means you repay $1.35 for every $1 advanced.

—Monthly Remittance
—Cost of the Advance
—Equivalent APR
—Extra vs. the Loan

Interest on a genuine trade-or-business loan is generally deductible as a business expense, but it is limited by the business interest expense limitation and there is a small-business exception. This calculator does not estimate any tax effect — see IRS Publication 334 and talk to a CPA.

How the math works

Payment = P × i ÷ (1 − (1 + i)^−n) i = APR ÷ 12, n = months Net proceeds = Loan − Origination fee − Other closing costs Effective APR = the rate at which your payments discount back to the NET proceeds DSCR = Annual cash available for debt ÷ Annual payments Advance APR = the same solve, on the advance's remittance and net proceeds

How to use it

  1. Enter the loan as quoted, then the fees separately. An origination fee is normally taken off the top, so you receive less than you borrow and repay all of it — that gap is the whole reason the effective APR is higher than the quote.
  2. For annual cash available for debt, use profit before this loan’s payments, with depreciation added back. Lenders call it net operating income and it is what they divide by your payments.
  3. Read the effective APR, not the quoted rate. It is the only figure that lets you compare two offers whose fees are structured differently.
  4. If you have been offered a merchant cash advance, put it in the second block. It is quoted as a factor rate with no APR anywhere on the paperwork, and converting it is usually the moment the decision becomes obvious.

A worked example

$75,000 at a quoted 9.5% over 60 months, with a 3% origination fee and $500 of closing costs. The payment is $1,575 and the total interest and fees come to $22,258. But you receive $72,250 and repay the full $75,000, so the effective rate is 11.12%, not 9.5%. With $48,000 a year available for debt, coverage is 2.54× — comfortable, since most lenders look for at least 1.25×.

The same business is offered $50,000 at a 1.35 factor rate over 12 months with a $1,000 fee. That is $5,625 a month and $18,500 of cost on $49,000 received — an equivalent 64% APR. Borrowing the same money on the loan terms above would cost about $15,942 less.

Where this sits in the Financial Literacy resource

A calculator tells you where you are. It does not tell you what to do next, and a number without a plan behind it tends to produce anxiety rather than progress. These stages are free, need no account, and cover the decision this calculator is measuring.

Learn it Stage 5: Build Wealth
This one is free, and so is most of the rest. 24 calculators, two complete courses and every article — no account, no email wall, nothing that stops halfway and asks for a card. If this was useful, the only thing we would ask is that you follow along or send it to the one person you know who needs it. That costs nothing, and it is how a small operation keeps going. Why we ask, and when →

Common questions

Why is the effective APR higher than the rate I was quoted?

Because an origination fee is normally deducted from the money you receive, while the repayment is calculated on the full loan amount. You pay interest on cash you never got. The quoted rate describes the loan on paper; the effective APR describes what happened to your bank account. The larger the fee and the shorter the term, the wider the gap.

What is a good DSCR?

Most lenders look for at least 1.25×, and SBA lenders commonly want 1.15× or better. Those are conventions rather than rules, and they vary by lender, industry and how stable your revenue looks. Below 1.0× the business does not generate enough to make the payment, which is worth knowing before a lender tells you.

Is a merchant cash advance a loan?

Legally, usually not. In most states it is structured as a purchase of future receivables, which is why it comes with a factor rate rather than an interest rate and why lending disclosure rules often do not apply. The equivalent APR here is what it would cost if it were a loan, which is the comparison you need even though the paperwork will never show it.

Is the interest tax deductible?

Interest on a genuine trade-or-business loan is generally deductible as a business expense, but it is limited by the business interest expense limitation, there is a small-business gross-receipts exception, and interest on personal debt is not deductible at all. This calculator deliberately does not estimate a tax effect. See IRS Publication 334 and talk to a CPA.

Should I take the shorter term or the lower payment?

A longer term lowers the payment and raises the total interest, and it also raises your DSCR, which can be the difference between an approval and a decline. Run both. The right answer depends on whether the constraint is monthly cash or total cost, and only you know which it is this year.

What this calculator is not

It is an educational model, not a projection and certainly not advice. It knows nothing about your income, your state, your debts or your benefits status, and it ignores taxes and fees unless the page says otherwise. If you receive SSI or SSDI some of this math works differently and getting it wrong can cost you eligibility — start with the Disability Wealth Guide instead. Our sourcing and correction policy is on the editorial standards page.

Nothing here is stored. Every calculation runs in your browser. No numbers are transmitted, logged or saved to any server, and no account is required. Close the tab and it is gone.