How to Use The Business Loan Calculator
Estimate Your Payments
To make the best use of this business loan calculator, you’ll need a few additional pieces of information. The calculator requires the following:
- Amount seeking
- Loan term
- Annual rate
- Origination fee
From the calculator, you will get an estimated monthly payment, origination fee, and total repayment.
Estimate How Big of a Business Loan You May Qualify For
You can also estimate how much you may qualify for if you take out a business loan. As soon as you fill out your information, the calculator will give you a range of dollar figures in which you may be able to borrow. This will give you an idea of the types of expenses you might be able to cover and whether or not you might need to seek additional financing from other sources. The inputs for how much money you can get from a business loan include:
Business Start Date
This is the month and year your business officially started operations.
Annual Revenue
This refers to the total amount of money your business makes during a 12-month period.
Last Month’s Deposits
Last month’s deposits show how much money you deposited into your business bank account in the previous month.
Estimated Credit Score
This is where you select your business’ estimated credit score.
Terms and Explanation
Here are the essential pieces of information you’ll need to enter and notice as outputs on our business loan calculator.
Amount Seeking
This is the amount you’d like to borrow. Typically, your credit score and business revenue will determine how much you’ll receive.
Loan Term
The loan term is how long you’ll take to pay back your loan. Business loans can be anywhere from a few months to several years or even longer.
Annual Rate
The annual percentage of rate (APR) is the cost to borrow money, expressed as a yearly percentage. It includes your interest rate, plus additional fees associated with taking out your business term loan.
Estimated Monthly Payment
The estimated monthly payment is what you’ll pay each month to repay your business term loan. It can give you an idea of how a business term loan might fit with your budget.
Total Repayment
Total repayment shows the total cost of your loan. This includes the entire principal, interest, and fee amount you’ll pay over time.
Origination Fee
The origination fee is designed to cover the costs of processing your loan application and approval. It’s typically expressed as a percentage of the total loan amount. Most origination fees average around 5%.
What is a Business Term Loan?
The term loan is one of the most popular small business loan options. It’s not flashy or fancy—it’s just the straightforward, classic way to finance your business.
With business term loans, amounts range between $5,000 and $2,000,000, and terms range between one and five years. To qualify for a term loan, you’ll need to have a profitable business that has been established for at least two years. And when you apply through Lendio, you can typically gain access to the funds in as little as 24 hours after approval.
The loan term is how long you’ll take to pay back your loan. Business loans can be anywhere from a few months to several years or even longer.
Because the term loan is flexible, you can use it for just about any business need. You can leverage a term loan to:
- Expand your business
- Acquire another business
- Increase cash flow
- Purchase equipment
- Hire staff
- And more
How to Calculate Payments for Business Loans
Our business loan calculator does the math for you so you can anticipate the monthly loan payments you would be expected to make if you took out a business term loan. The following four components contribute to your monthly payments.
Business Term Loan Amounts
Business term loans typically range from $5,000 to $2,000,000. The amount you qualify for will depend on your revenue, time in business, and credit history, in addition to other factors.
Business Term Loan Interest Rates
The interest rate is largely based on your credit history. If you have excellent credit, your interest rate can be as low as 9%. If you have some negative marks on your credit history, you can often still qualify for a business term loan, but you’ll likely end up with a higher interest rate.
Business Term Loan… Terms
The terms for this type of loan are typically between one and five years.
Business Term Loan Origination Fees
The origination fee on a term loan is typically about 5%, so you’ll want to factor this in when determining the total cost of your loan. Note that you won’t need to pay this fee while shopping around for a loan. Your origination fee will either be due at signing or rolled into the overall cost of your loan.
Application Fees? Not at Lendio.
Applying for and reviewing your loan options through Lendio is always free—however, many lenders will charge you application fees. It’s always a good rule of thumb to ask about potential application fees before starting the process with a lender.
How to Reduce Small Business Loan Costs
You can take the following steps to avoid surprises in the loan repayment process.
Make your minimum payment each month
That’s the easiest way to keep your costs under control. This practice helps you avoid late fees andboost your credit score, which is especially important if you’re working toward qualifying for a different form of business financing in the future.
Calendar your due dates
Set up automatic payments. Do whatever you need to do to “set it and forget it,” so those loan payments are always on time.
Find out where your lender stands on early payment
Some lenders will offer you a modest discount for paying off your loan early, while others may implement prepayment penalties. Before you rush to make advance payments, ask your lender about any potential penalties or discounts that apply to your business loan.
