How business loan payments work
Enter the amount, interest rate, term and how often you pay. Many bank and SBA loans are paid monthly, while some online lenders collect payments weekly or even daily. The calculator shows the payment for each period, the total interest and the APR after the origination fee, so you can compare very different offers on the same basis.
Common types of small business financing
- SBA 7(a) loans – partly guaranteed by the Small Business Administration, with loans up to $5 million and longer terms.
- Bank term loans and lines of credit – usually the lowest rates for established businesses with good credit.
- Equipment financing – the equipment itself secures the loan.
- Online and short-term loans – fast approval but often much higher APRs, especially with weekly payments.
Frequently asked questions
What is a factor rate?
Some short-term lenders and merchant cash advances quote a factor rate such as 1.3, meaning you repay $1.30 for every $1 borrowed. Over a few months, that can equal an APR well above 50%.
Do I need a personal guarantee?
Most small business loans, including SBA loans, require owners with significant ownership to personally guarantee the loan.
Is business loan interest tax-deductible?
Interest on money used for business purposes is generally a deductible business expense, subject to some limits for larger companies.