💰 Financial
Business Loan Calculator
Determine the monthly payments, total interest, and amortization schedule for a commercial business loan or SBA loan.
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Formula
M = P × [r(1+r)^n] / [(1+r)^n - 1]M- Monthly payment
P- Principal business loan amount
r- Monthly interest rate
n- Total number of monthly payments
Example
Small Business Expansion Loan
Calculating the payment for a $100,000 SBA loan at 7.5% for 10 years.
- Identify loan parameters: P = $100,000, Annual Rate = 7.5%, Term = 10 years.
- Convert to monthly values: r = 0.075 / 12 = 0.00625, n = 120 months.
- Apply the loan payment formula.
- Result: The monthly payment is $1,187.02, resulting in $42,442.15 in total interest.
Frequently Asked Questions
SBA (Small Business Administration) loans often have variable interest rates tied to the prime rate, though fixed-rate options are available. They generally offer lower rates than conventional business loans.
In most cases, the interest paid on a business loan is fully tax-deductible as a business expense, which lowers the effective cost of the loan.
Some commercial loans require smaller monthly payments for a set period, followed by a large "balloon" payment to pay off the remaining principal at the end of the term.