Business Loan Calculator
This business loan calculator works out the payment, total cost and APR of small business financing. Use it for a classic term loan with an interest rate, or for short-term financing and merchant cash advances priced with a factor rate. Choose monthly, biweekly, weekly or daily payments and add an origination fee: the APR shows what the financing really costs per year, so you can compare offers on the same basis.
Updated
Results
- Number of payments
- Total repaid
- Total cost of financingPayments − amount + fee
- Origination fee
- Funds you receiveAmount minus the fee
Results are estimates. See the methodology below.
How to use the calculator
- Choose the financing type: a term loan with an annual interest rate, or factor-rate financing.
- Enter the amount and either the interest rate or the factor rate (for example 1.3).
- Enter the term in months and the payment frequency.
- Add the origination fee as a percentage of the amount, if the lender charges one. Set it to 0 if there's none.
How the calculation works
Term loan
The payment is a standard amortizing payment: P = A × i ÷ (1 − (1 + i)^−n), where A is the amount, i the annual rate divided by the payments per year and n the number of payments. The calculator uses 12 payments a year for monthly, 26 for biweekly, 52 for weekly and 252 business days for daily payments.
Factor rate
The total payback is amount × factor, split into equal payments over the term. A factor of 1.3 on $30,000 means you repay $39,000, whatever the term.
Fee and APR
The origination fee is deducted from the funds you receive, so you pay back the full amount but only get the net. The APR is the internal rate of return that equates the net funds with the payments, multiplied by the number of payments per year. It's a nominal annual rate, comparable across offers with different terms, fees and payment schedules. Other costs, such as guaranty fees, closing costs or prepayment terms, aren't included unless you add them to the fee.
Worked examples
1. $50,000 term loan at 9.5% for 36 months, 2% fee
You pay $1,601.65 a month, $57,659.31 in all. The $1,000 fee means you receive $49,000, so the APR is 10.89% and the total cost $8,659.31. Without the fee, the APR equals the 9.50% rate and the cost is $7,659.31.
2. $50,000 at 12% for 24 months, weekly payments
104 payments of $541.32. With a 2% fee the APR is 14.10% and the total cost $7,297.16.
3. $30,000 at a factor rate of 1.3
| Term and payments | Payment | APR |
|---|---|---|
| 12 months, 252 daily | $154.76 | 54.81% |
| 12 months, 52 weekly | $750.00 | 54.13% |
| 6 months, 126 daily | $309.52 | 109.26% |
The cost is $9,000 in each case, but the shorter the term, the higher the APR. A 3% fee on the 12-month daily version cuts the funds to $29,100 and lifts the APR to 61.53%.
Reading the result
A factor rate is not an interest rate. A factor of 1.3 looks like 30%, but the full charge is due on the whole amount even though you repay it bit by bit from the first day. For comparison, a $30,000 term loan at 30% over 12 months with monthly payments costs $5,095.37, not $9,000. Always compare the APR and the total cost. The calculator assumes fixed, equal payments; with many merchant cash advances, daily payments rise or fall with your sales, so the actual timing and APR can differ. This is not financial or legal advice; review the agreement with your lender, accountant or attorney.
Frequently asked questions
What is a factor rate?
A multiplier that sets the total you repay. Merchant cash advance providers buy a fixed amount of a business's future receivables, and the business repays the advance plus a factor charge; the FTC notes that charge is often 20% to 50% of the amount. A factor of 1.3 on $30,000 means $39,000 of payments.
How do I convert a factor rate to APR?
The APR depends on how quickly you repay. The calculator solves for the rate that matches the money you receive with the payments. At a factor of 1.3, 12 months of daily payments works out to 54.81%, and 6 months to 109.26%. The FTC has reported merchant cash advances with estimated APRs in the triple digits.
How does an origination fee change the APR?
It reduces the money you actually get while the payments stay the same. On a $50,000 loan at 9.5% for 36 months, a 2% fee raises the APR from 9.50% to 10.89%.
What are typical terms for an SBA 7(a) loan?
The SBA guarantees part of 7(a) loans made by lenders, up to $5 million. It caps the rate lenders can charge as a spread over a base rate, with higher caps for smaller loans. On a $250,000, 10-year loan at 10.5% with a 3% fee, the monthly payment would be $3,373.37 and the APR 11.24%. Ask the lender for the current rate and every fee.
Why are daily payments based on 252 days?
The calculator counts daily payments on business days only, 252 a year, so a 12-month daily plan has 252 payments and a 6-month plan 126. If your agreement debits every calendar day, the real APR differs.
Sources
This calculator provides estimates for educational purposes and is not financial, tax or legal advice. Your loan agreement and the lender's disclosures determine your actual payments and costs.