Softonic

Business Loan Calculator

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Small business loans rarely quote an honest all-in cost. Origination fees, factor rates on merchant cash advances, and prepayment penalties all distort the sticker APR. Enter the loan amount, term, interest rate and any fees, and this calculator returns the true monthly payment, total cost, effective APR and a year-by-year principal/interest split — so you can compare a 7(a) SBA loan against an MCA without getting fooled by marketing math.

How business loan costs are calculated

  1. 1

    Enter loan amount and term

    Principal plus how many months or years. SBA 7(a) typically 10-25 years; bank term loans 3-7; online lenders 1-5.

  2. 2

    Enter rate type

    APR (standard interest rate), factor rate (MCA — e.g. 1.3x means you pay back $130k on $100k), or simple interest per month.

  3. 3

    Add fees

    Origination 1-6%, closing fees, SBA guarantee fee (2-3.75% on 7(a) over $150k). Each fee raises the effective APR.

  4. 4

    Read payment, APR and schedule

    Monthly payment, total interest, effective APR (fee-adjusted), plus an amortisation schedule by month or year.

Loan types and typical costs (2026 US market)

Type Typical APR Term Fees
SBA 7(a) 10-12% 10-25 years 2-3.75% guarantee + packaging
Traditional bank term 7-11% 3-10 years 0-2% origination
Online term (Funding Circle, OnDeck) 12-30% 6 mo - 5 yr 1-6% origination
SBA microloan 8-13% up to 6 yr 2-5% packaging
Business line of credit 8-25% revolving Draw / maintenance fees
Merchant cash advance 40-150% APR equivalent 3-18 mo (fixed total) Factor rate 1.1-1.5
Equipment finance 6-16% 2-7 yr 0-3% origination
Invoice factoring 1-5% per 30 days rolling Verification, due diligence

Factor rate vs APR — why MCAs look cheap

A $100,000 merchant cash advance at a 1.3 factor rate means you repay $130,000. Sounds like 30% interest. But if it’s repaid over 9 months via daily ACH, the effective APR lands closer to 70%. The calculator converts factor rate and term into an APR so you can compare apples to apples.

Hidden costs to watch

  • Stacking: taking a second MCA on top of the first; most lenders forbid this in their agreements.
  • Double-dipping: some lenders let you borrow more mid-term but charge factor rate on the entire new balance, not just the advance.
  • Prepayment penalties: common on SBA 7(a) fixed-rate loans; rare on variable SBA 7(a).
  • Collateral requirements: SBA 7(a) often requires all available collateral even if the loan is small.
  • Personal guarantee: nearly universal on small business loans; default puts personal assets at risk.

Before signing

Ask the lender to state APR inclusive of fees, in writing, and put it next to any competing offer. The cheapest monthly payment and the cheapest total cost are often different loans.

Frequently Asked Questions

The quoted rate excludes fees. Effective APR folds in origination, guarantee and closing fees as if they were interest. Under US law, APR is the number that matters — make sure it’s the one on the comparison.

Usually yes if there’s no prepayment penalty. Factor-rate loans lock in the total cost regardless of early payoff, so prepaying offers zero savings — that’s a flag to refinance, not to prepay.

Revolving credit is estimated using average balance × APR. The exact cost depends on your draw pattern — the tool provides best- and worst-case ranges.

SBA 7(a) under $25k often unsecured; above $25k typically requires business and sometimes personal real estate. Bank term loans want blanket lien on business assets plus personal guarantee. Online lenders often rely on personal guarantee alone.

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