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Business Loan Calculator

Calculate your accurate monthly payments and true APR by including origination fees and documentation costs. Compare effective rates across different lenders to make smarter financing decisions.


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years months


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Results

Payback every month:—
60 payments:—
Interest:—
Interest + Fee:—
Real rate (APR):—

Understanding Loan Costs

Compounding & Frequency

The frequency of compounding affects interest accumulation. Daily compounding—typical of some alternative lenders—results in a higher total cost than monthly compounding.

Pay Back Frequency

Repayment schedules vary by lender. Traditional banks usually require monthly payments, while online lenders often require weekly deductions, impacting your cash flow.

Origination Fee Impact

Lenders often charge 1%–5% upfront to process a loan. This reduces the capital you actually receive while you pay interest on the full amount, raising the effective APR.

Real Rate (APR) vs. Nominal Rate

The APR is your "true" cost. It combines the stated interest rate with all mandatory fees, giving you a standardized number to compare different loan offers.

How to Use This Business Loan Calculator

This tool goes beyond simple amortization. It is designed to help business owners uncover the hidden costs of financing by factoring in fees that are often overlooked.

Why Use This Tool?

Many commercial lenders advertise a low interest rate but add substantial "origination fees" or "closing costs." A loan with a 7% interest rate and a 4% fee is significantly more expensive than a flat 8% loan with no fees. This calculator reveals that difference.

When to Use It

  • Comparing Offers: When you have two term sheets with different rate structures and fee schedules.
  • Budgeting: To determine if the required daily or weekly payments fit your current operational cash flow.
  • Refinancing Analysis: To see if the effective APR of a new loan is truly lower than your current debt.

How It Works

The calculator uses the Newton-Raphson method to solve for the internal rate of return (IRR) based on the net loan proceeds (Loan Amount minus Fees) and the periodic payment amount. This result is annualized to provide the precise APR.

Limitations

This tool assumes a fixed interest rate and a standard amortization schedule. It may not perfectly model complex products like Merchant Cash Advances (MCAs) with variable factor rates or loans with balloon payments at the end of the term.

Frequently Asked Questions

Why is the APR higher than my interest rate?
The APR (Annual Percentage Rate) represents the total cost of borrowing. It is higher because it includes not just the interest, but also the upfront fees (origination, documentation) spread over the life of the loan.
How do origination fees affect my loan?
An origination fee is deducted from your loan proceeds before you receive the money. For example, on a $100,000 loan with a 3% fee, you receive $97,000 but pay interest on the full $100,000. This increases your effective cost of capital.
What is the difference between monthly and weekly payments?
Monthly payments are standard for long-term bank loans. Weekly or daily payments are common with alternative online lenders to reduce their risk. Frequent payments can help pay down principal faster but may strain your weekly cash flow.
Does this calculator work for Merchant Cash Advances (MCA)?
It provides a close estimate if the MCA has a fixed term. However, MCAs often use "factor rates" instead of interest rates. You can convert a factor rate to an APR by entering the total payback amount and term to see the effective annual cost.

Disclaimer:

This tool is for estimation and educational purposes only. Actual loan terms, compounding methods, and fees will vary by lender. Always consult with a financial advisor before signing a loan agreement.
Last updated: February 2026