Business Loan Calculator — Repayment Breakdown & APR Estimation

Imagine you need $50,000 to expand your small business — hire staff, buy equipment, or open a new location. You want to know: how much will you repay each month? How much interest will you pay over the life of the loan? And how does the APR change if the lender charges origination fees? A good Business Loan Calculator answers all of that in seconds and produces a clear amortization schedule so you can plan cash flow.

Why this matters

Getting the repayment numbers right is essential for business planning. Monthly payments affect payroll, inventory purchases and operating cash. Total interest shows the real cost of financing. APR (annual percentage rate) reveals the true yearly cost when fees are included — it helps you compare offers fairly. Use the calculator before you sign anything so you don’t squeeze your business cash flow by mistake.

What you enter

• Loan Amount ($) — the principal you borrow (e.g., $50,000).
  
• Annual Interest Rate (%) — the nominal annual rate (e.g., 6.0%). If the loan compounds monthly, provide the quoted APR or nominal rate.
  
• Loan Term (years) — how long you will take to repay (e.g., 5 years).
  
• Start Date — the date when the loan funds or repayments start (affects the amortization calendar).
  
• Fees (optional) — origination fees, closing costs, or prepayment penalties (used for APR estimation).
  
• Payment frequency — usually monthly (calculator assumes monthly by default).
  

Core formulas

Core formulas (what the calculator uses)

All the math below assumes monthly payments and monthly compounding:

• Monthly interest rate:
  \(r_m = \dfrac{r_{\text{annual}}}{12}\)
  Example: 6% → 0.06/12 = 0.005
• Number of payments:
  \(n = \text{years} \times 12\)
• Monthly payment (fixed-rate amortizing loan):
  \[ \text{Payment} = P \times \frac{r_m}{1 – (1 + r_m)^{-n}} \]
  where P is loan principal.
• Total payment over life of loan:
  \(\text{Total Paid} = \text{Payment} \times n\)
• Total interest paid:
  \(\text{Total Interest} = \text{Total Paid} – P\)
• APR with fees:
  APR is the annual interest rate that equates the net proceeds (principal minus fees) to the stream of loan payments. That requires solving for the rate r in the present-value equation (usually by numeric methods such as IRR or Newton–Raphson), so the calculator uses an internal solver to estimate APR when fees are present.

How the calculator works

1. You enter: loan amount, annual rate, term, start date, and any fees.
   
2. It converts the annual rate to a monthly rate and computes number of monthly payments.
   
3. It calculates the fixed monthly payment using the formula above.
   
4. It builds an amortization schedule: for each month it shows:
   
   • Beginning balance
     
   • Interest for the month = beginning balance × rm
     
   • Principal paid = payment − interest
     
   • Ending balance = beginning − principal paid
     
5. It sums totals: total paid and total interest.
   
6. If fees are entered, the tool runs a numeric solver to compute APR: the rate that makes the present value of payments equal to the net funds received (principal minus fees).
   

It outputs: monthly payment, total interest, amortization table (first/last rows shown), and APR (if fees entered).

FAQs