Small Business Loan Calculator
Model monthly payments, total interest, debt-service coverage, and compare two lender quotes, built for owners sizing SBA, bank, and online business loans.
Loan Summary
| # | Payment | Principal | Interest | Balance |
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Compare Another Offer
Run a second quote side-by-side, banks, SBA lenders, and online lenders often differ on rate, term, and fees.
| Metric | Primary offer | Second offer |
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Understanding Business Loans
Monthly Payment is your fixed payment amount, calculated using the loan amount, interest rate, and term.
Total Interest is how much you'll pay beyond the original loan amount over the life of the loan.
Origination Fee is a one-time charge (usually 1-5%) taken from your loan proceeds. A $50,000 loan with a 2% fee means you receive $49,000.
Typical Business Loan Rates (2026)
| Product | APR range |
|---|---|
| SBA 7(a) | Prime + 2.25–4.75% |
| SBA 504 (fixed assets) | ~6–7% |
| Bank term loan | 6–13% |
| Business line of credit | 8–24% |
| Equipment financing | 4–30% |
| Online term lender | 9–99% |
Spreads from SBA program rules and Fed H.15 commercial benchmarks; your quote depends on credit, revenue, and collateral.
💡 Loan Shopping Tip
Always compare the total cost of loan, not just monthly payments. A lower rate with high fees can cost more than a higher rate with no fees.
Small Business Loans: What You Will Actually Pay
According to the SBA 7(a) loan program, the most common small business loan, the average loan size in fiscal year 2024 was approximately $530,000 with a typical term of 10 years for working capital and up to 25 years for real estate. Interest rates on 7(a) loans are pegged to the prime rate plus a spread, for loans over $350,000, the maximum rate is Prime + 3%, which as of early 2026 translates to roughly 10.5%–11.5% APR. SBA 504 loans, used for fixed assets, offer lower rates (around 6%–7%) but require 10% down and only fund equipment or real estate.
The Federal Reserve Small Business Credit Survey (2024) reports that 53% of small business loan applicants receive the full amount requested, 25% receive partial funding, and 22% are denied. Approval rates vary sharply by lender type: large banks approve about 13% of applications, small banks approve about 19%, and online lenders approve around 27% - though online lenders charge significantly higher effective APRs, often 20%–50% once fees are included. A $100,000 loan at 11% over 10 years costs about $1,378/month and $65,400 in total interest; the same loan at 25% APR costs $2,275/month and $173,000 in interest.
Before signing, calculate your debt-service coverage ratio (DSCR) - your annual net operating income divided by annual loan payments. Most banks require DSCR of at least 1.25, meaning you need 25% more income than the loan payment. The calculator above shows your principal-plus-interest payment; add that to existing debt, compare against your trailing 12-month cash flow, and confirm you clear the 1.25 threshold before committing. A payment that looks affordable in a good month can become suffocating during a slow quarter.
When to Use This Calculator
Before Applying for a Loan
Know your monthly payment before you sit down with a banker. Enter the rate and term you expect to be offered and see if the payment fits your cash flow before committing.
Comparing Multiple Lenders
Different lenders quote different APRs, terms, and fees. Run each offer through the calculator and compare total cost of loan, not just monthly payment, to find the true cheapest option.
Equipment Financing Decisions
When considering equipment financing, compare the loan payment against the revenue or cost savings the equipment will generate. Use the ROI Calculator alongside this to build a complete picture.
Industry Benchmarks
Typical business loan terms by loan type (2026 data, rates vary by creditworthiness).
| Loan Type | Rate Range | Typical Term | Max Amount |
|---|---|---|---|
| SBA 7(a) | Prime + 2.25–4.75% | 10–25 yr | $5M |
| SBA 504 | ~6–7% | 10–25 yr | $5.5M |
| SBA Microloan | 8–13% | Up to 6 yr | $50K |
| Bank Term Loan | 6–13% | 3–10 yr | $1M+ |
| Business LOC | 8–24% | Revolving | $250K+ |
| Equipment Financing | 4–30% | 2–7 yr | $5M |
| Invoice / AR financing | 1–3%/mo | 30–90 days | Varies |
| Online Business Lender | 9–99% | 3 mo–5 yr | $500K |
Monthly payment on a $100,000 loan
Fixed-rate amortizing payments computed with the same formula as the calculator above (no fees). Compare how rate and term move the payment.
| APR | 5-year term | 7-year term | 10-year term |
|---|---|---|---|
| 6% | $1,933/mo | $1,461/mo | $1,110/mo |
| 8% | $2,028/mo | $1,559/mo | $1,213/mo |
| 10% | $2,125/mo | $1,660/mo | $1,322/mo |
| 12% | $2,224/mo | $1,765/mo | $1,435/mo |
| 15% | $2,379/mo | $1,930/mo | $1,613/mo |
Total interest on a $100,000 loan
Lifetime interest over the full term at the same APR assumptions, the hidden cost of stretching the term.
| APR | 5-year term | 7-year term | 10-year term |
|---|---|---|---|
| 6% | $15,997 | $22,712 | $33,225 |
| 8% | $21,658 | $30,924 | $45,593 |
| 10% | $27,482 | $39,450 | $58,581 |
| 12% | $33,467 | $48,283 | $72,165 |
| 15% | $42,740 | $62,093 | $93,602 |
Loan application outcomes by lender type
Share of applicants receiving full funding, partial funding, or denial, Federal Reserve Small Business Credit Survey (2024 report, firms seeking credit).
| Lender type | Full amount | Partial | Denied |
|---|---|---|---|
| Large bank | 13% | 18% | 69% |
| Small bank | 19% | 22% | 59% |
| Credit union | 21% | 20% | 59% |
| Online lender | 27% | 24% | 49% |
| Finance company | 24% | 21% | 55% |
| CDFI / community lender | 31% | 19% | 50% |
Source: Federal Reserve Banks, Small Business Credit Survey Report on Employer Firms (credit outcomes by lender type) · 2024 Rounded shares of applicants receiving full funding, partial funding, or denial; not a guarantee of your outcome.
Common Mistakes
Comparing monthly payments, not total cost
A lower monthly payment often means a longer term and dramatically higher total interest paid. Always compare the total cost of loan (principal + interest + fees) across options.
Ignoring origination fees
A 2% origination fee on a $100K loan means you receive $98K but owe $100K. On short-term loans, fees can add more to your effective cost than the stated interest rate.
Taking more than you need
Every extra dollar borrowed costs interest. Borrow the minimum amount needed plus a small buffer. You can always take a second draw or line of credit if needed.
Not checking prepayment penalties
Some loans charge a fee for paying off early. If you plan to refinance or pay down the loan quickly, this can eliminate the benefit of a lower rate.
Data Sources
Current business loan rate benchmarks from the Federal Reserve's Selected Interest Rates statistical release.
SBA 7(a) and microloan terms sourced from SBA.gov official program documentation.
Average commercial and industrial loan rates from FDIC and Federal Financial Institutions Examination Council reports.
Frequently Asked Questions
What is a good interest rate for a small business loan?
Interest rates vary widely by loan type and borrower profile. SBA 7(a) loans typically range from 10-13% APR. Bank term loans average 6-13%. Online lenders charge 15-50%+ for faster approval. Your credit score, business revenue, and time in business are the primary factors lenders use to set your rate.
How is a business loan monthly payment calculated?
Monthly payment = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate (annual rate / 12), and n is the total number of monthly payments. This formula assumes a fixed-rate amortizing loan where each payment covers both interest and principal.
What is an origination fee and how does it affect my loan cost?
An origination fee is a one-time charge by the lender to process your loan, typically 0.5-5% of the loan amount. It is usually deducted from the loan proceeds upfront, meaning you receive less than the face value of the loan but pay interest on the full amount.
What is an amortization schedule?
An amortization schedule is a table showing each monthly payment broken down into principal and interest portions. In early months, most of your payment goes toward interest. As you pay down the balance, more goes toward principal. The schedule lets you see exactly how much you owe at any point in time.
Is it better to get a shorter or longer loan term?
Shorter terms mean higher monthly payments but significantly less total interest, you own the asset faster. Longer terms lower monthly payments and improve cash flow, but you pay much more in total interest. A good rule of thumb: match the loan term to the useful life of the asset. Use the IRS Tax Topic 409 to understand how loan interest deductions affect your tax picture.
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Explore More Business Data
Research loan options and business financing with data from federal primary sources.
SmallBizCalc educational calculators draw on official federal tax and small-business reference data, no number is typed in by an editor. See our editorial standards & corrections policy, the methodology behind these numbers, or report a data error on this page. See the public changelog for verified updates. Data current as of 2026. Primary sources: Internal Revenue Service and U.S. Small Business Administration.