Business Loan Calculator
A business loan calculator is a tool that helps business owners estimate the costs associated with business loans. Business loans are used to finance various business needs including startup costs, equipment purchases, inventory, expansion, and working capital. These loans can be secured or unsecured, with varying terms and interest rates.
Business Loan: Paying Back a Fixed Amount Periodically
Use this calculator for basic calculations of business loans, or click the links for more detail on each.
Business Loan with Balloon Payment: Paying Back a Lump Sum Due at Loan Maturity
Business Loan with Interest-only Period: Predetermined Amount Due at Loan Maturity
Use this calculator to compute the initial value of a business loan based on a predetermined face value to be paid back at loan maturity.
Business Loan: Fixed Amount Paid Periodically
Business loans are installment loans used to finance various business needs. These loans typically have fixed or variable interest rates and terms ranging from 1 to 25 years. The loan term often depends on the purpose of the loan and the type of business.
Business Loan with Balloon Payment: Single Lump Sum Due at Loan Maturity
Some business loans include a balloon payment at the end of the loan term. This means the borrower makes regular payments during the loan term but must pay a large lump sum at the end to fully pay off the loan.
Business Loan with Interest-only Period: Predetermined Lump Sum Paid at Loan Maturity
Many business loans offer an interest-only payment period during the initial months or years. During this time, borrowers only pay the interest on the loan, with the full principal amount due at the end of the interest-only period.
Business Loan Basics for Borrowers
Interest Rate
Business loan interest rates depend on factors such as the borrower's credit score, business financials, loan term, and whether the loan is secured or unsecured. Rates can be fixed or variable.
Loan Term
Business loan terms typically range from 1 to 25 years. Shorter terms result in higher monthly payments but lower total interest costs over the life of the loan.
Loan Requirements
Lenders typically require business financial statements, tax returns, and personal guarantees from business owners. Some loans may also require collateral.
Advantages of Business Loans
- Capital Access: Provides funds for business growth and expansion
- Tax Benefits: Business loan interest may be tax deductible
- Ownership Retention: Unlike equity financing, loans don't dilute ownership
- Predictable Payments: Fixed-rate loans have consistent monthly payments
- Flexible Use: Funds can be used for various business purposes
Business loans can provide the capital needed for business growth and expansion. However, borrowers should carefully consider their ability to make regular payments and the total cost of the loan over its term.