Business Loan Calculator

A business loan is a financial product that provides companies with the capital they need for various purposes, such as:

• Starting a new business
• Expanding operations
• Purchasing equipment or inventory
• Managing cash flow
• Refinancing existing debt

This calculator models fixed-rate loans with equal payment intervals. Enter the amount borrowed, nominal annual interest rate, term, and any fees paid separately from scheduled payments. Actual contracts can use different interest conventions, fee timing, and repayment terms.

Amortized Loans

Amortized loans have regular payments that include both principal and interest. Each payment reduces the loan balance, and the proportion of principal to interest changes over time.

Interest-Only Loans

With interest-only loans, you only pay the interest during the loan term, with the principal due at maturity. This results in lower regular payments but requires a large final payment.

Payment Frequencies

• Monthly: 12 payments per year
• Quarterly: Four payments per year
• Annually: One payment per year

The calculator uses different formulas depending on the loan type:

Amortized Loan Payment Formula

For amortized loans, the payment is calculated using the following formula:

Payment = P × (r × (1 + r)^n) / ((1 + r)^n - 1)

When r is zero, payment = P ÷ n.

Where:

• P = Principal loan amount
• r = Periodic interest rate (annual rate ÷ periods per year)
• n = Total number of payments

Interest-Only Payment Formula

For interest-only loans, the regular payment is simply the periodic interest:

Payment = P × r

The final interest-only payment also repays the full principal. The payment schedule excludes separately entered fees; total cash outlay includes them. The displayed cost ratio is (total interest + fees) ÷ original principal ÷ years. It does not account for when payments or fees occur and is not an annual percentage rate (APR).

For example, a $1,000 amortized loan at a 12% nominal annual rate over one year with monthly payments and $50 in separate fees has a regular payment of about $88.85, about $66.19 in interest, and about $1,116.19 in total cash outlay. Its displayed cost ratio is about 11.62%, which should not be compared with a lender's APR.

Source for the distinction: the U.S. Consumer Financial Protection Bureau's Regulation Z § 1026.22relates APR to the amount and timing of value received and payments. Its § 1026.3 generally exempts primarily business-purpose credit. These definitions are cited for explanation, not as a claim that those rules govern this calculator or a particular loan. Both sections checked September 29, 2026; this is a check date, not a publication or effective date.

The amortization schedule shows how each payment is split between principal and interest over the loan term. Key points to understand:

• With a positive fixed rate, the interest share usually falls as the balance declines
• As the loan balance decreases, more of each payment goes toward principal
• The final payment brings the loan balance to zero
• Fees entered separately appear in total cash outlay, not in the schedule's interest column