About the Business Loan Calculator
A business loan's advertised rate rarely tells you the whole cost. Origination fees and other charges are often taken from the money you receive, so you pay interest on more than you get. This business loan calculator works out the monthly payment for a loan with equal payments and then calculates the true annual percentage rate, based on the amount you actually receive after fees. It also shows the total interest, the total cost of borrowing and the cost per dollar received, so you can compare offers from banks and online lenders fairly. It suits term loans with equal monthly payments.
Updated October 2026
How to use the Business Loan Calculator
- 1Enter the loan amount, the interest rate and the term in months.
- 2Enter the origination fee as a percent of the loan.
- 3Enter any other fixed fees.
- 4Read the monthly payment and the APR with fees.
- 5Compare the total cost of borrowing between offers.
A worked example
A 100,000 loan at 8 percent over 60 months has a payment of about 2,028. With a 2 percent origination fee and 500 of other fees you receive 97,500. The total of payments is about 121,659, so borrowing costs about 24,159 on 97,500 received, and the APR with fees works out at about 9.1 percent. Comparing that figure, not 8 percent, with another lender's offer gives a fair answer.
Questions to ask a lender
- What is the APR including all fees?
- Is there a penalty for paying off early?
- Do I need to give a personal guarantee or collateral?
- Is the rate fixed or variable?
- When will the funds reach my account?
Related tools
The APR Calculator finds the true rate for any loan with fees, the Loan Calculator and Amortization Calculator show payments and schedules, the Break-Even Calculator tells you what sales the loan must support, the Profit Margin Calculator checks pricing and the Invoice Generator helps you bill customers on time.
Features
- Monthly payment
- APR including fees
- Money you actually receive
- Total interest and total cost
- Cost per dollar received
- Terms up to 360 months
- Runs in your browser
Frequently asked questions
What is the true cost of a business loan?
It is the interest plus all fees, compared with the money you actually receive. If you borrow 100,000 with a 2 percent fee you only receive 98,000 but repay on 100,000. The APR with fees spreads the whole cost into a yearly rate so loans can be compared.
What is an origination fee?
It is a charge for setting up the loan, usually 1 to 5 percent of the amount, and is normally deducted from the funds you receive. A 2.5 percent fee on 75,000 is 1,875. Some lenders have no origination fee and a higher rate instead, so compare the APR.
Why is the APR higher than the interest rate?
Because of fees. You pay interest on the full loan but get less cash, so the effective cost is higher. The shorter the term, the bigger the effect of a fixed fee on the APR. A 2 percent fee adds about 0.5 to 1 percentage point to a five-year loan.
Does this work for loans with daily or weekly payments?
Not exactly. Some online lenders and merchant advances use factor rates and daily or weekly payments, which can mean a much higher APR than the quoted figure. Convert them by entering the total repayment and number of months in a separate calculation, or ask the lender for the APR.
What should I compare when choosing a lender?
Compare APR with fees, the monthly payment, the term, any prepayment penalty, security or personal guarantees required, and how fast you get the money. The cheapest loan on paper is not always the best if it has a harsh penalty or needs collateral you can't spare.
Is this financial advice?
No. It is an arithmetic tool to help you compare offers. Confirm all numbers with the lender in writing, and consider asking an accountant or adviser before taking on debt.