Calculate your business loan payments and total financing cost
Typical: 6-15% for commercial
One-time fee for processing
Monthly Payment
$0.00
Effective APR: 0%
Total Interest
$0.00
Origination Fee
$0.00
Total Payments
$0.00
Total Cost
$0.00
A commercial loan calculator is a financial tool that helps business owners estimate their monthly loan payments and total financing costs. It calculates payments based on the loan amount, interest rate, loan term, and any origination fees associated with the loan.
Commercial loans are used by businesses for various purposes: purchasing equipment, expanding operations, acquiring real estate, financing inventory, or providing working capital. Understanding the true cost of these loans is essential for making informed financial decisions.
The calculator reveals both the monthly payment and the total cost of financing, including interest and fees. This comprehensive view helps business owners compare different loan offers and determine whether borrowing is financially viable for their situation.
Calculating commercial loan payments involves the same amortization formula used for other loans. Here's the process:
Monthly Payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
Total Interest = (Monthly Payment × n) − P
Origination Fee = Loan Amount × Fee %
Total Payments = Monthly Payment × n
Total Cost = Loan Amount + Total Interest + Fees
$100,000 commercial loan at 8% for 5 years:
| Loan Amount | $100,000.00 |
| Interest Rate | 8% |
| Term | 5 years (60 months) |
| Monthly Payment | $2,027.64 |
| Total Interest | $21,658.40 |
| Origination Fee (2%) | $2,000.00 |
| Total Payments | $121,658.40 |
| Total Cost | $123,658.40 |
Commercial loan interest rates vary widely based on several factors: borrower's credit score (typically 680+ required), business revenue and profitability, time in business (usually 2+ years), collateral provided, and the overall economic environment.
As of 2026, commercial loan rates range from approximately 6% for well-qualified borrowers with excellent credit and strong financials to 15% or higher for higher-risk borrowers or unsecured loans. SBA loans often have lower rates due to government guarantees.
Here's how different interest rates affect a $100,000 5-year loan:
The loan term is the length of time you have to repay the commercial loan. Terms vary by loan type: equipment loans typically 3-7 years, commercial real estate 5-25 years, and working capital lines 1-5 years.
Loan term significantly affects both monthly payment and total interest. Longer terms mean lower monthly payments but more total interest. Shorter terms have higher payments but save money on interest.
Choose the shortest term you can comfortably afford. While longer terms provide breathing room in your monthly budget, the additional interest can be substantial over the life of the loan.
Your monthly payment is the fixed amount you must pay each month to repay the loan within the specified term. It includes both principal and interest, calculated to ensure full amortization by the loan's end date.
For businesses, the monthly payment must fit within the operating budget. Lenders typically require a debt service coverage ratio (DSCR) of 1.25 or higher, meaning your business generates at least 25% more cash flow than needed for debt payments.
Before committing to a commercial loan, calculate your monthly payment and ensure it's sustainable. Consider seasonal fluctuations in revenue and build in a buffer for unexpected expenses.
The total financing cost represents everything you'll pay over the life of the loan—principal, interest, and fees. Understanding this figure is crucial for making informed borrowing decisions.
Many business owners focus only on monthly payments and overlook the total cost. A loan with a lower monthly payment but longer term may actually cost more in total. Always calculate and compare total financing costs when evaluating loan options.
Here's the total cost breakdown for a $100,000 loan at 8%: