# Business loan calculator

https://salesbond.app/tools/business-loan-calculator/
Updated: 2026-11-06

# Business Loan Calculator

A business loan payment is P × r ÷ (1 − (1 + r)^−n), with r the annual rate ÷ 12 and n the months. Borrowing $100,000 at 10% for five years costs $2,124.70 a month and $27,482.30 in interest. A 3% origination fee raises the effective APR to 11.32%.

Enter the amount, the interest rate and the term to get the monthly payment, total interest and an amortization schedule by year and by month. Add an origination fee to see what you actually receive and the effective APR. For SBA-sized amounts the calculator also shows the SBA 7(a) maximum variable rate.

## SBA 7(a) maximum variable rates

The SBA caps variable 7(a) rates at the base rate plus a spread that depends on the loan amount. With the prime rate at 7.00% (Federal Reserve, November 5, 2026):

| Loan amount | Maximum rate |
| --- | --- |
| $50,000 or less | prime + 6.5% = 13.5% |
| $50,001 to $250,000 | prime + 6.0% = 13% |
| $250,001 to $350,000 | prime + 4.5% = 11.5% |
| More than $350,000 | prime + 3.0% = 10% |

## Example

A shop borrows $100,000 at 10% for five years to buy equipment. The monthly payment is $2,124.70, the last one $2,125.00, and the total interest is $27,482.30. In the first year $9,269.63 of the payments is interest and $16,226.77 pays down the loan. If the lender keeps a 3% origination fee, the shop receives $97,000, the loan costs $30,482.30 in all and the effective APR is 11.32%.

## How to lower the cost of a business loan

Compare offers by APR and total cost, not by the monthly payment alone. A shorter term costs more each month but much less in interest. Ask whether the origination fee can be cut, check for prepayment penalties, and look at an SBA-guaranteed loan, whose rates and fees are capped. Before you borrow, check with the [break-even calculator](https://salesbond.app/tools/contribution-margin-calculator/) that sales will cover the new payment.

## Frequently asked questions

### How is a business loan payment calculated?

For a fixed-rate term loan, the monthly payment is P × r ÷ (1 − (1 + r)^−n), where P is the amount borrowed, r is the annual rate divided by 12 and n is the number of months. A $100,000 loan at 10% for five years costs $2,124.70 a month.

### What is the monthly payment on a $100,000 business loan?

It depends on the rate and term. At 10% it is $2,124.70 a month over five years and $1,321.51 over ten years. A longer term lowers the payment but raises the total interest: $27,482.30 over five years against $58,580.56 over ten.

### What is a good interest rate for a business loan?

Rates follow the prime rate, 7.00% as of November 5, 2026, plus a margin for risk. SBA 7(a) variable rates are capped at prime plus 3% to 6.5% depending on the amount. Online lenders and merchant cash advances often charge much more, so compare the APR, not just the rate.

### What is the difference between the interest rate and the APR?

The interest rate is the cost of borrowing the principal. The APR also counts upfront fees, such as an origination fee, spread over the term. A 3% fee on a $100,000 five-year loan at 10% raises the effective APR to 11.32%, because you receive only $97,000.

### How long are business loan terms?

Working capital and equipment loans usually run one to ten years. SBA 7(a) loans are generally up to 10 years, or up to 25 years when they finance real estate. Short-term online loans can be just a few months, with weekly or daily payments.

### Does the calculator include all loan costs?

It includes interest and an origination fee. It does not include an SBA guaranty fee passed on to you, closing costs, insurance, prepayment penalties or variable-rate changes. Ask the lender for the full fee list and the APR before you sign.

Related tools: [break-even calculator](https://salesbond.app/tools/contribution-margin-calculator/), [business plan template](https://salesbond.app/tools/business-plan-template/), [self-employment tax calculator](https://salesbond.app/tools/self-employment-tax-calculator/). More on sales and running a sales team on the [SalesBond blog](https://salesbond.app/blog/) and the [home page](https://salesbond.app/).

## Official sources

- [U.S. Small Business Administration: 7(a) terms, conditions and eligibility](https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility) — maximum variable rates by loan amount, terms up to 10 or 25 years.
- [Federal Reserve, H.15 Selected Interest Rates](https://www.federalreserve.gov/releases/h15/) — bank prime loan rate 7.00%, release of November 5, 2026.
- [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-loans-interest-rate-and-its-apr-en-733/) — interest rate vs APR.

**Updated on Nov 6, 2026.** This calculator is for information only and is not tax, legal or payroll advice. Results are for a fixed-rate loan with equal monthly payments; your lender’s offer, fees and rounding may differ slightly.