Business Loan Calculator
Calculate business loan payments including origination fees.
See your monthly payment, total interest, and effective cost of borrowing.
Monthly Payment
Business loan payments use the standard amortization formula, but you must also account for fees:
M = P × [r(1+r)^n] / [(1+r)^n - 1]
Origination fees are typically deducted from the loan proceeds upfront:
Net Proceeds = Loan Amount × (1 - Origination Fee% / 100)
Your effective interest rate is higher than the stated rate because you pay interest on the full amount but receive less:
Effective Rate ≈ (Total Interest + Fees) / Net Proceeds / Years × 100
Example: $100,000 business loan at 8% for 5 years with a 2% origination fee:
- Origination fee = $2,000
- You receive = $98,000
- Monthly payment = $2,027.64
- Total interest = $21,658
- True cost of borrowing = $23,658 (interest + fees)
Tips:
- Compare the effective rate, not just the stated rate, across lenders
- SBA loans typically offer lower rates but have stricter requirements
- Factor in the origination fee — it increases your true borrowing cost
- Shorter terms mean higher payments but less total interest