What is a good interest rate for a business loan?

SBA loans: 6-10%. Bank term loans: 7-12%. Online lenders: 10-30%. The rate depends on credit score, time in business, revenue, and collateral. SBA loans consistently offer the best rates.

How much can I borrow for my business?

SBA 7(a) loans go up to $5 million. Bank term loans vary by lender. Online lenders typically offer $5,000-$500,000. The amount depends on revenue, creditworthiness, and collateral.

An SBA loan is partially guaranteed by the Small Business Administration, reducing risk for lenders and resulting in lower rates and longer terms. The SBA does not lend directly but works through approved lenders.

Business Loan Calculator

Q: How long does it take to get a business loan?

SBA loans: 30-90 days. Bank loans: 2-4 weeks. Online lenders: 1-7 days. Speed comes at a cost, with faster options typically charging higher rates.

Free business loan calculator. Compare loan options, estimate monthly payments, and see total cost for SBA loans, term loans, and lines of credit.

Built by Abiot Y. Derbie, PhD — Postdoctoral Research Fellow. Quantitative researcher specializing in statistical modeling and data-driven decision systems.

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This calculator is for informational and educational purposes only. Results are estimates based on the information you provide and standard financial formulas. This is not financial advice. Consult a qualified financial advisor for decisions specific to your situation. Full Disclaimer

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Loan Types

What types of business loans are available?

Term loans: lump sum repaid over 1-25 years — best for equipment, expansion, or one-time investments. Lines of credit: revolving access to funds — best for cash flow gaps and seasonal needs. SBA loans: government-backed with lower rates and longer terms — best value but slower approval. Equipment financing: the equipment itself serves as collateral — easier approval. Invoice factoring: sell unpaid invoices for immediate cash — expensive but fast. Choose based on purpose, timeline, and how quickly you need funds.

Qualification

What do business lenders look for?

Five key factors: credit score (680+ for best rates, 600+ minimum for many lenders), time in business (2+ years preferred, startups need stronger personal credit), annual revenue (minimum $100K-250K for most term loans), debt service coverage ratio (DSCR above 1.25), and collateral (business assets, equipment, or personal guarantee). Strengthening any one factor can compensate for weakness in another.

True Cost

How do you calculate the true cost of a business loan?

Compare using total cost of capital, not just interest rate. A $100,000 loan at 8% with 2% origination fee for 5 years: total interest $21,660 + fee $2,000 = $23,660 total cost. APR captures this: approximately 8.8%. Factor in any prepayment penalties, monthly fees, and required minimum balances. Online lenders may show weekly payments that appear low but annualize to 15-25% APR — always convert to annual terms for comparison.

Business Loan Calculator: Estimate Your Monthly Payment and Total Cost

A business loan calculator computes the monthly payment, total interest, and payoff schedule for term loans, SBA loans, and lines of credit used to fund business operations, equipment, real estate, or expansion. Business lending is a $800+ billion annual market (Federal Reserve SLOOS data), with rates and terms varying dramatically by loan type, lender, and business strength.

Enter your loan amount, interest rate, term, and any fees above. The calculator shows monthly payments, total cost, and amortization schedule with comparison across different term lengths.

Business Loan Rates by Type (2026)

Loan Type	Rate Range	Term	Best For
SBA 7(a)	9.75-12.25%	10-25 yrs	General purpose, working capital
SBA 504	6.0-7.0%	10-25 yrs	Real estate, heavy equipment
Bank term loan	7.0-12.0%	1-10 yrs	Established businesses, expansion
Online lender (OnDeck, Kabbage)	10-60%+	3 mo-5 yrs	Quick funding, less qualification
Equipment financing	6.0-15.0%	2-7 yrs	Vehicles, machinery, technology
Business line of credit	8-25%	Revolving	Cash flow gaps, seasonal needs
Merchant cash advance	20-150% effective	3-18 mo	Last resort only

The Federal Reserve's Small Business Credit Survey (2024) shows that 47% of small businesses applied for financing in the past year. Approval rates: large banks 43%, small banks 75%, online lenders 66%. The approval gap explains why SBA loans are so popular — the government guarantee enables bank approvals that would otherwise be declined. See our SBA Loan Calculator for SBA-specific analysis.

Frequently Asked Questions

What is the average business loan rate?

Bank term loans: 7-12%. SBA 7(a): 9.75-12.25% (Prime + margin). SBA 504: 6-7% fixed. Online lenders: 10-60%+ (wide range based on risk). Equipment financing: 6-15%. Your rate depends primarily on: business revenue and profitability, time in business (2+ years preferred), personal credit (680+ for best rates), and collateral available.

How much business loan can I qualify for?

General guideline: lenders approve loans up to 10-15% of annual revenue for unsecured, or up to 80-90% of collateral value for secured loans. SBA 7(a): up to $5 million. SBA 504: up to $5.5 million. A business with $500,000 revenue might qualify for $50,000-$75,000 unsecured or $200,000+ with real estate collateral. DSCR (debt service coverage ratio) of 1.25+ is typically required.

Should I avoid merchant cash advances?

In almost all cases: yes. MCAs have effective APRs of 20-150%+ and aggressive daily repayment terms that can cripple cash flow. They are designed for speed and easy qualification — not borrower benefit. Explore every alternative first: SBA microloans, credit union loans, business credit cards (0% intro), or even personal loans (7-15%) before considering an MCA. The convenience of fast funding is not worth 5-15x the cost.

How long does it take to get a business loan?

Online lenders: 1-7 days. Bank term loan: 2-6 weeks. SBA 7(a): 2-3 months. SBA 504: 2-4 months. SBA Express: 36 hours for SBA approval. Speed and rate are inversely correlated — the fastest loans are the most expensive. If timing allows, apply 3-4 months before you need funds and pursue the slower, cheaper SBA or bank options.

Do I need a personal guarantee for a business loan?

Almost always — for small businesses. SBA loans require personal guarantees from anyone owning 20%+ of the business. Bank loans for small businesses nearly always require a personal guarantee. Only very large businesses ($10M+ revenue) with strong balance sheets can access non-recourse business loans. The personal guarantee means your personal assets (home, savings) are at risk if the business cannot repay — understand this before signing.

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