What is the difference between a term loan and a line of credit?

Term loan: lump sum disbursed upfront, repaid over fixed months with set payments. Line of credit: revolving credit you draw from as needed and repay. Lines are better for cash flow gaps; term loans for specific purchases.

What does APR include that the stated rate doesn't?

APR = annual percentage rate that includes the origination fee amortized over the loan term. A $100K loan at 8% with 3% fees has an APR of ~8.9% for a 5-year term or ~9.7% for a 3-year term (shorter term = fees matter more).

How do SBA loans work?

SBA 7(a) loans are partially guaranteed by the Small Business Administration, reducing risk for lenders and allowing lower rates. Maximum $5M, terms up to 25 years (real estate) or 10 years (equipment/working capital). Requires 2+ years in business, good credit, demonstrated repayment ability.

Can I pay off a business loan early?

Check for prepayment penalties — common on SBA loans (3% in year 1, 2% in year 2, 1% in year 3 for loans > 15 years) and some bank loans. Most online business loans allow early payoff. Early payoff saves interest but may not be optimal if the money earns more elsewhere.

Business Loan Calculator — Monthly Payment, Interest & APR | KalkWise

By the KalkWise Editorial Team Reviewed for accuracy Updated June 2026

What is the business loan calculator — monthly payment, interest & apr?

In short

A $100,000 business loan at 8% for 5 years (60 months) has a monthly payment of approximately $2,028 and total interest of $21,660. A 1% origination fee adds $1,000 upfront.

Calculates monthly payment, total interest, origination fee, and true APR for a business loan, accounting for fees in the APR calculation.

How to use this calculator

1Enter the loan amount requested.
2Enter the annual interest rate.
3Enter the loan term in months.
4Enter the origination fee percentage (0 if no fee).

The formula

M=P·r·(1+r)n(1+r)n−1

APR=solve: PV of payments = loan (with fee)

Net Loan = P − Fee; M = Net Loan × r(1+r)^n ÷ [(1+r)^n − 1]; APR = rate that discounts payments back to P

P: — Loan principal
r: — Monthly interest rate
n: — Months
F: — Origination fee

Worked example

The scenario

$100,000 loan, 8% rate, 60 months, 1% origination fee.

gives

The result

Origination fee: $1,000. Net loan: $99,000. Monthly payment: $2,006. Total interest: $21,360. True APR: ~8.4%.

Common use cases

Compare business loan offers from banks and online lenders.
Budget monthly cash flow for a new loan.
Evaluate whether loan costs are justified by expected business returns.
Compare APR across loans with different fee structures.

Limitations & assumptions

Assumes fixed interest rate — variable rate loans change over time.
Does not model prepayment penalties or early payoff savings.
SBA loans have specific fee structures and guarantee fees not modeled here.
Business loan underwriting considers revenue, time in business, and credit — this models payment math only.

Frequently asked questions

SBA 7(a) loans: 10.5–13.5% (prime + spread). Bank term loans for established businesses: 7–12%. Online lenders (Kabbage, OnDeck): 15–35%+. Rates depend on credit score, time in business, revenue, and collateral.

Disclaimer: KalkWise calculators are provided for general informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. Results are estimates based on the figures you enter and the assumptions described above. Actual outcomes will vary. Consult a qualified professional before making financial decisions.

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