Business Loan Calculator

Last updated July 2, 2026

Business loans come in more forms than personal credit, and understanding the structure of each type is essential before comparing terms. Term loans — a fixed sum at a fixed rate repaid over a defined period — are the most traditional structure and work best for specific, bounded purposes like equipment purchase or expansion capital. SBA 7(a) loans offer federally guaranteed financing up to $5 million at favorable rates (currently prime plus 2.25 to 4.75 percent depending on loan amount and term) for small businesses that meet eligibility criteria. Lines of credit provide revolving access to capital up to a credit limit, suitable for managing cash flow variability rather than financing specific assets.

The annual percentage rate is the standard comparison metric for business loans, but it can be misleading for short-term products like merchant cash advances, invoice factoring, and revenue-based financing, where costs are expressed as factor rates rather than APRs. A merchant cash advance with a 1.3 factor rate sounds modest — borrow $50,000 and repay $65,000 — but if repaid over six months, the effective APR is approximately 90 percent. Converting any business financing cost to an APR using the same formula enables a genuine comparison between dramatically different products. Established businesses with strong credit and collateral should typically access SBA loans or conventional bank financing before considering online lenders, which are more accessible but price the accessibility premium into their rates.

Comparing any business loan on an annualized cost basis is more meaningful than comparing factor rate, weekly payment, or total repayment amount alone. Monthly payment, total interest cost, and multiple lender offers create a clearer view of the true financing cost. SBA-backed financing is almost always worth pursuing if the business qualifies, as the rate advantage over alternative lending is often 30 to 60 percentage points in APR terms.