Business loans often carry origination fees that are deducted from the amount you receive. The APR spreads those fees over the loan to show the true yearly cost, which makes loans with different fees comparable.
How to use the Business Loan Calculator
- Loan amount
- Interest rate (nominal, per year)
- Compounding frequency
- Loan term
- Payment frequency
- Origination fee (% of loan)
- Other upfront fees
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the loan amount, interest rate, compounding, term, payment frequency and any upfront fees.
Tips
- Use figures for the same period (a month, a quarter or a year) for every input so ratios compare like with like.
- Track the metric over time – the trend usually tells you more than a single value.
- Compare your result with industry benchmarks, which vary a lot between sectors.
- Treat the result as a starting point for a decision, then check the assumptions behind each input.
Common mistakes to avoid
- Mixing monthly and yearly numbers in the same calculation.
- Using revenue where the formula needs profit (or the other way round).
- Forgetting hidden costs such as taxes, fees, overheads or your own time.
Inputs explained
| Field | What to enter |
|---|---|
| Loan amount | Amount in your currency |
| Interest rate (nominal, per year) | In % |
| Compounding frequency | Choose one: Yearly, Semi-annually, Quarterly, Monthly … |
| Loan term | Units: years, months |
| Payment frequency | Choose one: Monthly, Semi-monthly, Bi-weekly, Weekly … |
| Origination fee (% of loan) | In % |
| Other upfront fees | Amount in your currency |
What each result means
- Number of payments = round([Loan term]÷12×[Payment frequency])
- Payment per period = pmt([Periodic rate]÷100, [Number of payments], [Loan amount])
- Total interest = [Payment per period]×[Number of payments] – [Loan amount]
- Total upfront fees = [Loan amount]×[Origination fee (% of loan)]÷100 + [Other upfront fees]
- Cash you receive = [Loan amount] – [Total upfront fees]
- Total cost of the loan (interest + fees) = [Total interest] + [Total upfront fees]
- APR (including fees) = rate([Number of payments], 0 – [Payment per period], [Cash you receive])×[Payment frequency]×100
Example values
How the main result changes when Loan amount changes and everything else stays at the example values above:
| Loan amount | Payment per period |
|---|---|
| 50,000 | 1,037.92 |
| 75,000 | 1,556.88 |
| 100,000 | 2,075.84 |
| 125,000 | 2,594.79 |
| 150,000 | 3,113.75 |
| 200,000 | 4,151.67 |
Formula
Periodic rate i = (1 + r ÷ m)^(m ÷ p) − 1Payment = P × i ÷ (1 − (1 + i)^−n)APR = rate that equates the cash received (loan − upfront fees) with the paymentsWorked example
Inputs — Loan amount: $100,000; Interest rate (nominal, per year): 9 %; Compounding frequency: Monthly; Loan term: 5 years; Payment frequency: Monthly; Origination fee (% of loan): 2 %; Other upfront fees: $500.
Results — Number of payments = 60; Payment per period = $2,075.84; Total interest = $24,550.13; Total upfront fees = $2,500.00; Cash you receive = $97,500.00; Total cost of the loan (interest + fees) = $27,050.13; APR (including fees) = 10.09 %.
Frequently asked questions
What is a typical business loan rate?
Bank term loans often run 7–12% a year; online lenders can charge far more.
Why is the APR higher than the interest rate?
Fees reduce the money you actually receive, so the effective cost is higher.
How long are business loans?
Typically 1–10 years; real-estate loans can run up to 25 years.
What formula does the Business Loan Calculator use?
Periodic rate i = (1 + r ÷ m)^(m ÷ p) − 1.