Business Loan Calculator

Introduction

This Business Loan Calculator computes fixed monthly payment, total interest, and amortization for a commercial term loan from principal, APR, and term. Many versions also estimate Debt Service Coverage Ratio (DSCR) when you enter net operating income, letting you see whether payment fits lender thresholds near 1.25x. Use it for term loan quotes, equipment notes, and SBA 7(a) rough checks before submitting financials.

Who this calculator is for

Small business owners reviewing a $150,000 seven-year offer at 9.25% from a bank or SBA lender belong here. Controllers prepping board slides on new cap-ex debt and brokers sanity-checking client affordability also use it. Franchisees borrowing for build-out often must show DSCR on stabilized year-two NOI, not year-one ramp losses; enter NOI that matches lender pro forma when using this check.

Consumer personal borrowing should use the Personal Loan Calculator or Loan Calculator; this page assumes business context and DSCR language.

What it estimates

Loan payment uses standard amortization. Annual debt service equals monthly payment times twelve. DSCR equals net operating income divided by annual debt service when NOI is supplied. Values above 1.0 mean income covers payment; many lenders want 1.15 to 1.35 on commercial credits. Global DSCR tests include all business debt service in the denominator when covenants require it.

Balloon structures, interest-only periods, variable SOFR spreads, and covenant step-downs are not modeled. Guarantees and personal collateral are outside scope.

Inputs explained

NOI should be stabilized earnings before interest, taxes, depreciation, and amortization adjustments lenders accept, not raw revenue.

• Loan amount: Proceeds funding the project, such as $150,000.
• Annual interest rate: Fixed APR for the quoted term, such as 9.25%.
• Term: Months or years of amortization, 7 years here.
• Net operating income (optional): Annual NOI for DSCR, such as $85,000.
• Existing debt service (optional): Other annual payments to compute consolidated DSCR.

How to read the results

Monthly payment feeds cash flow forecasts. Total interest shows cost of capital versus equity financing. DSCR below lender minimum signals need for larger down payment, longer amortization, or lower loan amount.

Run sensitivity: reduce NOI ten percent and recalculate DSCR for stress case banks may request.

Worked example

$150,000 at 9.25% for 84 months (7 years) yields payment near $2,440 and total interest about $55,000 over life. Annual debt service about $29,280. If NOI is $85,000, DSCR equals 85,000 divided by 29,280 equals about 2.90, comfortable versus 1.25 minimum. If NOI is $40,000, DSCR about 1.37, still passing many gates but tighter.

Add existing $12,000 annual debt service in consolidated field: DSCR on new loan alone overstated; combined denominator rises.

Practical use cases

Compare bank term loan versus equipment lease from lease calculator on same $150,000 acquisition. Model owner cash injection to improve DSCR.

Pair with depreciation calculator for EBITDA add-back discussions. Household guarantee stress: ensure owner still passes personal Budget Calculator after business payment. Lenders may also test global DSCR including personal mortgage; add that payment to existing debt service field when applicable.

Limitations and related tools

SBA fees, prepayment penalties, and variable rates not fixed for full term change economics. Underwriting uses tax returns, not calculator NOI you type. SBA guarantee fee financed into loan increases principal and debt service; add fee to amount field when comparing to existing high-rate card debt you might pay off with proceeds.

Equipment lease: lease calculator. Straight-line books: depreciation calculator. APR with fees: APR Calculator. Multiple business debts: debt payoff calculator.

How It Works

1. Enter loan terms. Type amount, APR, and amortization length from term sheet or LOI.
2. Add NOI for DSCR. Enter annual net operating income if checking coverage ratio.
3. Calculate payment and DSCR. Click Calculate and read monthly payment, total interest, and DSCR line.
4. Stress-test NOI. Lower NOI ten to twenty percent and recalculate to mimic lender downside case.

Formula and methodology

The Business Loan Calculator uses this identity for the scenario you enter. A bank, payroll system, or tax program may round on a 360-day year or average daily balance, so a statement can differ by a small amount.