Calculate business loan payments, total cost, DSCR, and affordability. Compare SBA, term, equipment, and line of credit options.
A business loan calculator helps entrepreneurs and business owners understand the true cost of financing and whether their revenue can support the debt. Beyond just monthly payments, smart business borrowing requires understanding DSCR (Debt Service Coverage Ratio), the payment-to-revenue ratio, and how different loan types compare.
Business loans range from SBA-backed loans with favorable terms to high-rate short-term financing for businesses with limited credit history. Interest rates vary widely (5–30%+), and origination fees of 1–5% can add thousands to your cost. The right loan type depends on your purpose, timeline, credit profile, and cash flow.
This calculator computes your payment, total cost including fees, and key affordability metrics. The DSCR analysis tells you whether lenders will likely approve your application (most require 1.25+). The reference table compares SBA, term, equipment, line of credit, and invoice factoring options to help you choose the right financing structure. Check the example with realistic values before reporting.
Business loan decisions directly impact cash flow and profitability. This calculator goes beyond basic payment math to provide the financial ratios lenders use — DSCR and revenue coverage. Understanding these numbers before you apply saves time, prevents rejections, and helps you negotiate better terms. Keep these notes focused on your operational context.
Monthly Payment M = P × [r(1+r)^n] / [(1+r)^n − 1]. DSCR = Annual Revenue / Annual Debt Service (loan payment + existing debt). Payment-to-Revenue = Monthly Payment / Monthly Revenue × 100%.
Result: $3,282/mo — DSCR 1.16 — Payment is 6.6% of revenue — $75,694 total interest
A $200,000 loan at 9.5% for 7 years costs $3,282/month with $75,694 in total interest. The 3% origination fee adds $6,000 upfront. With $50,000 monthly revenue, the DSCR of 1.16 is below the typical 1.25 minimum — you may need higher revenue or a smaller loan.
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Debt Service Coverage Ratio measures your ability to repay. DSCR = Annual Revenue / Annual Debt Payments. A DSCR of 1.25 means revenue is 25% above debt obligations. Most lenders require 1.25+ for approval.
SBA 7(a) loans offer the best rates (10–13%) with terms up to 25 years. Equipment loans are best for machinery/vehicle purchases. Lines of credit suit working capital needs. The best type depends on your purpose and qualifications.
Lenders typically allow borrowing where the monthly payment stays below 30–40% of monthly revenue and DSCR exceeds 1.25. Credit score, collateral, business age, and industry also factor into the maximum amount.
Yes, interest on business loans is generally tax-deductible as a business expense. This effectively reduces the true cost of borrowing. Consult a tax professional for your specific situation.
SBA loans typically require 680+. Traditional bank loans want 700+. Online lenders may accept 600+. Better credit scores get lower rates and higher loan amounts, so improving credit before applying can save significant money.
Origination fees range from 1–5% of the loan amount. SBA loans have guarantee fees of 2–3.75%. Some lenders charge application fees, underwriting fees, or prepayment penalties. Always ask for a complete fee schedule before signing.