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A loan should fit the way your business gets paid.

A small business loan provides money for business expenses that you repay under an agreed schedule. The useful question is how that schedule fits your cash flow—not just how much you can borrow.

Start with the amount you need, what it will pay for, and the payment you can carry through a slow month. Then compare the financing type, total cost, and obligations behind each offer.

Calculate your payment Explore funding options

Estimate your loan payments

Enter your loan terms to estimate the monthly payment. You can also test a rate change or an interest-only period. The starting values are examples.

View or download a month-by-month breakdown of payments, interest, principal, and remaining balance. Both buttons calculate your latest inputs automatically. CSV opens in Excel or Google Sheets.

Fees are modeled as paid at closing or deducted from proceeds, not financed. Change inputs, then calculate to refresh the estimate.

First regular monthly payment

Interest paid across all scheduled payments
Total payments + upfront fees
Net proceeds after upfront fees
Balloon principal due at maturity
Final payment (including balloon)
Illustrative annualized cost*

*Monthly cash-flow rate × 12, using only the fees you enter. This is not a lender’s APR disclosure. A variable-rate result assumes your selected change occurs and the new rate stays in place.

Projected remaining principalUse the calculator to see your projected principal balance.Month 0
Amortization schedule
MonthAnnual ratePaymentInterestPrincipalBalance
How this calculator works

Interest for each month equals the opening principal balance × annual nominal rate ÷ 12. Payments occur at month-end. For a level-payment loan, payment = P × r ÷ [1 − (1 + r)−n], where P is principal, r is the monthly rate, and n is the remaining number of payments. At 0%, payment = P ÷ n.

A variable-rate scenario has one reset. At that month, principal-and-interest payments are recalculated over the remaining amortization period. Equal-principal schedules keep the principal portion constant. Interest-only payments cover interest until the chosen period ends, then the balance amortizes over the remaining term. If interest-only lasts for the whole term, the principal is due with the final payment. Partial amortization uses a longer repayment horizon and pays off the remaining balance as a balloon at maturity.

The annualized-cost estimate solves for the monthly rate that discounts the scheduled payments to net proceeds, then multiplies by 12. It is not the effective annual yield. Fees are assumed paid at closing; there are no recurring fees, late payments, prepayments, compounding of unpaid interest, or additional draws. Calculations retain full precision; displayed amounts are rounded to cents. Actual daily accrual, day-count conventions, payment dates, lender rounding, caps, floors, and disclosures can change the result. This tool does not model factor-rate advances or invoice factoring.

For payment examples and repayment comparisons, visit our business loan calculator.

Small business loans and alternatives: compare your options

Match the repayment period to the expense. A machine that will work for years is a different financing decision from inventory you expect to sell next month.

Start with the expenseA practical route to the right comparison
One planned purchaseTerm loan

Compare a set amount and a defined repayment schedule.

Recurring cash gapsLine of credit

Compare draw rules, available credit, and ongoing fees.

Equipment purchaseEquipment financing

Compare the useful life, lien, down payment, and payoff.

Unpaid customer invoicesInvoice factoring (not a loan)

Compare the advance, fee clock, recourse, and collections.

These are starting points, not eligibility decisions. Invoice factoring is a sale of unpaid invoices, not a loan. It is included here as an alternative to borrowing.

OptionWhat it can suitWhat to check
Term loanA defined project, expansion, or working-capital needMonthly, weekly, or daily repayment; fixed or variable pricing; early payoff
Business line of creditRepeated short-term cash-flow gapsDraw fees, repayment after each draw, renewals, and available limit
SBA-backed loanEligible businesses seeking lender financing supported by an SBA guaranteeProgram eligibility, lender underwriting, documentation, collateral, and guarantees
Equipment financingVehicles, machinery, and other business equipmentOwnership, equipment lien, down payment, and term versus useful life
Invoice factoring
Receivables sale, not a loan
Eligible unpaid business-customer invoicesCustomer credit, advance rate, discount fees, recourse, and collection arrangements
Revenue-based advanceBusinesses considering repayment tied to future receiptsWhether the agreement is a receivables purchase, collection frequency, reconciliation terms, and total purchased amount

Bank loans, private lenders, and online providers

A bank and a nonbank lender can offer similar-looking term loans with very different costs and requirements. “Private lender” describes the provider, not a standard interest rate or approval rule. Ask who is funding the agreement, who services it, and whether anyone arranging the financing charges a fee.

For SBA 7(a) loans, a participating lender makes the loan. The SBA guarantee does not replace lender underwriting or eliminate your repayment obligation. See the SBA’s 7(a) overview.

Illustrative bakery team planning a commercial oven installation

A long-lived asset and a short-term inventory purchase can call for different repayment schedules. Illustrative image.

Small business loan rates: compare the whole cost

The interest rate is one part of the price. Upfront fees reduce the cash available to your business, while payment frequency and term affect how quickly you return it. Compare written offers for the same amount, term, and payment schedule whenever possible.

Nominal interest rate is the stated rate charged for using principal, before fees. Annual percentage rate (APR) expresses an annualized borrowing cost that includes interest and applicable finance charges under the disclosure method. It is useful for comparing offers, but does not tell you whether the payment is affordable or cover every possible charge. Ask which fees are included.

Read the money from left to rightIllustrative $100,000 loan with a $3,000 fee withheld at closing
$100,000Loan principal
$3,000Upfront fee
$97,000Cash received
Payments are still based on the $100,000 principal. A cash-flow cost calculation starts with the $97,000 received.

At 12% nominal interest over 60 months, the scheduled payment is about $2,224.44. The fee raises the annualized cost above 12%, even though the monthly loan payment is unchanged.

Fixed versus variable interest rates

A fixed rate stays the same for the period stated in the agreement. On a fully amortizing, level-payment loan, that normally makes the scheduled principal-and-interest payment predictable.

A variable rate can change with a stated index plus a margin. Read the reset frequency, floor, cap, and rules for payment changes. In the calculator, try a higher rate at your first reset date and check the new payment against a slower revenue month. The scenario is not a forecast.

Questions that make two offers easier to compare

  • How much cash reaches my account after fees?
  • What is each payment, how often is it due, and when does repayment end?
  • What is the total scheduled repayment, including any balloon?
  • Which fees are included in the APR or other annualized disclosure?
  • Will early payoff reduce the cost, and is there a prepayment charge?
  • What assets or personal guarantees support the agreement?

How interest and financing charges are calculated

Two offers can use the same percentage and produce different dollar costs. Always identify the balance being charged, the time period, and whether unpaid charges can be added to principal.

Three ways a financing charge can work.Illustrative examples—not comparable APR quotes

12% annual interest

$50,000 × 12% ÷ 12
$500 first-month interest

Monthly reducing-balance model. Later interest falls as principal is repaid.

1.20 factor rate

$50,000 × 1.20
$60,000 total repayment

$10,000 financing charge before other fees. This does not mean 20% APR.

2% monthly flat fee

$50,000 × 2%
$1,000 per month

Example assumes the fee uses the original amount. Contract terms may use another base.

Simple interest on a declining balance

Interest is calculated on the unpaid principal for each accrual period. Under this calculator’s monthly model, $50,000 at 12% annual interest produces $500 of interest in the first month. If the principal falls to $40,000, a full month at that rate produces $400.

Many amortizing loans use a reducing-balance approach, but a product name alone does not tell you the accrual method. A daily-interest contract may use principal × annual rate × days ÷ 365, or another specified day-count basis. Check the agreement. The CFPB’s explanation of simple versus precomputed interest illustrates the distinction using auto loans.

Compound interest and capitalized interest

Compounding occurs when unpaid interest is added to the balance and later interest is charged on that larger amount. For example, $10,000 with 1% monthly interest and no payments becomes $10,100 after one month, then $10,201 after two, if the contract capitalizes interest monthly. These are mechanics, not terms of an Excel offer.

A loan payment formula containing an exponent does not, by itself, mean you are paying interest on unpaid interest. If each payment covers all accrued interest, principal can decline normally. Read how missed payments, deferments, and capitalization are treated.

Flat fees and weekly or monthly charges

A provider may charge a fixed dollar fee or a percentage each week or month. Ask whether the percentage applies to the original funding amount, the outstanding balance, or each draw. A monthly percentage cannot be treated as a comparable APR just by multiplying by 12 when principal is also being repaid or other fees apply.

Factor rates

A factor rate multiplies the original funding amount to set a total repayment or purchased receivables amount. At 1.20, $50,000 becomes $60,000 before additional fees. The $10,000 difference is 20% of the original amount, but it is not an annual percentage rate. The repayment time and pattern matter. A fixed factor-rate charge is set upfront rather than growing through interest-on-interest compounding. Other contractual fees can still apply, and early payoff may not reduce the charge.

Factor pricing appears in some short-term financing and merchant cash advances. An MCA is generally structured as a purchase of future receivables, not a conventional loan. Read the agreement’s legal structure, reconciliation process, and payoff terms rather than relying on its marketing label.

Invoice factoring is not a loan

Invoice factoring is the sale of eligible unpaid customer invoices to a factoring company. A loan creates a debt that you repay; factoring gives you earlier access to money your customers already owe. It is included here for comparison as an alternative to a loan.

Invoice factoring fees are different from a fixed factor-rate charge. They may be a set fee for an agreed period or increase with the time an invoice remains unpaid. A time-based fee is not the same as interest compounding on unpaid interest, but it means the final cost is not always one fixed amount. Check the fee basis, billing periods, reserve, recourse, and collection terms. Use the invoice factoring guide and calculator for that separate transaction; a term-loan calculator is not an appropriate substitute.

Amortization: when do you repay the principal?

Amortization describes how a balance is paid down over time. The loan term is when the debt matures. Those periods can differ, which is why a low regular payment can leave a large final bill.

For a step-by-step explanation, see our guide to calculating an amortization schedule.

Follow the remaining balanceSchematic paths—shapes explain structures, not specific offers

Fully amortizing

Regular payments repay all principal by the end.

Interest-only + balloon

Principal stays outstanding until the final payment.

Partially amortizing

Some principal is repaid regularly; the rest is a balloon.

Vertical: principal remaining · Horizontal: time to maturity

Level principal-and-interest payments

With a fixed rate and full amortization, the scheduled payment stays level. Early payments contain more interest; later payments contain more principal. A longer term can lower the payment while increasing total interest.

Equal-principal payments

The same amount of principal is repaid each period, with interest added on the remaining balance. At a fixed rate, total payments decline. The larger early payments can be harder on cash flow.

Interest-only periods

Interest-only payments do not reduce principal. If principal repayment starts later, payments can rise sharply because less time remains. If the entire term is interest-only, plan for the full principal payoff at maturity. Refinancing is not guaranteed.

Partial amortization and balloons

A payment can be calculated over, for example, ten years even though the loan matures in five. The remaining balance is then due as a balloon. Compare the final payment as carefully as the regular payment.

Negative amortization and seasonal schedules

If a payment is less than the interest due and unpaid interest is capitalized, the balance grows. That is negative amortization. The calculator does not model it.

A seasonal business may ask a provider about a customized schedule. Availability varies, and lower payments in slow months can mean higher payments later. Use a month-by-month cash-flow forecast; an annual revenue average can hide the tightest months. The calculator models monthly schedules, not a bespoke seasonal agreement.

Small business loan requirements

There is no single credit score, revenue level, or time-in-business rule for every small business loan. Providers evaluate the product, repayment capacity, business history, credit profile, and any available security together.

What providers reviewWhat to prepare
Revenue and cash flowRecent business bank statements, financial statements, existing debt payments, and a realistic forecast
Business history and ownershipFormation records, ownership information, licenses where applicable, and time in operation
CreditPersonal and business credit information where required, plus explanations for material issues
Use of fundsA specific budget, equipment quote, purchase agreement, or working-capital plan
Collateral and guaranteesAsset details, existing liens, and a clear understanding of each owner’s obligations

Can the business carry another payment?

Debt service coverage ratio (DSCR) compares cash available for debt service with required principal and interest payments over the same period. A ratio above 1.0 means the numerator exceeds the debt payments in that calculation; it does not guarantee approval. Providers define qualifying cash flow and required coverage differently.

Give the payment some breathing roomIllustrative monthly DSCR check—not a lender threshold
Cash available for debt service$15,000
Existing + proposed debt payments$10,000
DSCR1.50×
$10,000 debt service$5,000 cushion

If qualifying cash flow falls to $10,000, coverage falls to 1.00× and that cushion disappears. Test a slower month before deciding what feels affordable.

Use a consistent cash-flow definition rather than substituting gross sales. Our DSCR guide explains the ratio in more detail. You can also review the four Cs of business lending to understand common underwriting considerations.

What if you have bad credit or a new business?

Some providers consider weaker credit, but higher prices, smaller amounts, or additional requirements may apply. No-credit-check and guaranteed-approval claims deserve scrutiny. Ask whether a credit inquiry is soft or hard before authorizing it.

A startup may not have the operating history required for many cash-flow loans. Consider whether an SBA microloan intermediary, community lender, or equipment-specific provider fits your situation. The SBA microloan program offers loans of up to $50,000 through intermediaries; individual lenders set their own credit requirements. Read the SBA microloan program details.

Does “unsecured” mean no personal risk?

No. An unsecured product may still involve a personal guarantee or contractual claims against business assets, depending on how the provider uses the term. Ask specifically about collateral, a blanket UCC lien, and personal guarantees. Read our unsecured business loan guide before assuming those obligations are absent.

How to get a small business loan

  1. Set the amount and purpose

    Build a budget for the actual expense. Include a realistic timing cushion without borrowing more than the business can repay.

  2. Check your cash flow and documents

    Gather the records the provider requests. Reconcile statements and list existing debt so the new payment is evaluated alongside current obligations.

  3. Compare suitable financing options

    Match the use of funds to the product and term. Ask Excel Capital about available options and the provider’s requirements before relying on a quoted rate or funding timeline.

  4. Review the written offer

    Compare net proceeds, total cost, repayment frequency, variable-rate provisions, collateral, guarantees, and early-payoff terms. Resolve unclear charges before accepting.

  5. Plan for repayment before funding

    Confirm the first due date and payment method. Keep enough operating cash available for payroll, taxes, and the next slow period.

Illustrative business owner comparing financing schedules at a desk

Compare written terms side by side, including the amount received and the final payment. Illustrative image.

Have a funding need in mind?

Tell us what you’re financing and when you need it. We can discuss available options and the next steps for your business.

Explore funding options

Approval, pricing, timing, and product availability depend on underwriting and the terms offered.

Small business loan questions

How much would a $100,000 business loan cost per month?

At a fixed 12% annual interest rate over 60 monthly payments, a fully amortizing $100,000 loan is about $2,224.44 per month before fees. Different rates, terms, payment frequencies, and balloon provisions change the result. This is an example, not an available offer.

What credit score do I need for a small business loan?

There is no universal minimum. Requirements depend on the provider and product, and credit is considered alongside revenue, cash flow, business history, and other factors. Ask about the specific program rather than relying on a single score quoted for all business loans.

Can an LLC get a small business loan?

Yes, an LLC can apply, but forming an LLC does not establish eligibility or remove a personal guarantee. Providers review the business, its owners, and the financing request under their own criteria.

Can I get a small business loan for a startup?

Some programs and providers consider startups. Expect questions about your experience, business plan, credit, investment, and projected repayment capacity. A program that requires established revenue may not fit a business that has not opened yet.

Are there small business loans for women-owned businesses?

Women-owned businesses can apply for general business financing and explore targeted programs offered by particular organizations. Eligibility and availability vary. Distinguish a loan, which must be repaid, from a grant, and verify any program directly with its provider.

Is a factor rate of 1.20 the same as 20% APR?

No. A 1.20 factor means the scheduled repayment or purchased amount is 1.20 times the original funding amount, before any additional fees. APR or a comparable annualized cost also depends on time, payment timing, and applicable charges.

Are interest-only payments cheaper?

They can make the initial payment smaller, but they do not reduce principal. The balance must be repaid later, and total interest may be higher than on an otherwise comparable amortizing loan. Review both the later payment and any balloon.

Can I pay a business loan off early?

It depends on the agreement. Reducing principal early may save interest on a reducing-balance loan, but prepayment charges, fixed fees, or precomputed costs can limit the savings. Request a written payoff calculation before deciding.

How quickly can a small business loan fund?

Timing depends on the product, provider, documentation, verification, and underwriting. A preliminary indication is not final approval. Confirm the steps still outstanding and the expected funding date before making commitments.

Sources and calculation notes

This guide explains financing structures and uses illustrative math. Product availability and contract terms must be confirmed with the provider. Program information was checked October 13, 2026.

Calculator assumptions and formulas are shown above so you can compare the estimate with a provider’s payment schedule. Images are illustrative and do not depict customer testimonials.

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