Business Loan Calculator
Calculate payments for SBA loans, term loans, equipment financing, and lines of credit. Compare loan types, check DSCR requirements, and understand your total borrowing costs.
Loan Details
DSCR Qualification Check
Debt Service Coverage Ratio measures your ability to service debt. Most lenders require 1.25x minimum.
Calculation: (Revenue × 20% profit margin) ÷ Total annual debt service
Loan Payment Results
Cost Breakdown
Business Loan Types Compared
SBA 7(a) Loan
Most popular SBA loan for working capital, equipment, real estate. Government guarantee reduces risk for lenders.
SBA 504 Loan
Fixed-rate loan for real estate and equipment purchases. Requires 10% down payment and owner-occupancy.
Term Loan
Traditional bank loan with fixed payment schedule. Good for established businesses with strong credit.
Business Line of Credit
Revolving credit line for short-term cash flow needs. Only pay interest on amount used.
Equipment Financing
Equipment serves as collateral. Lower rates due to secured nature. Terms match equipment life.
Business Loan Rates by Credit Score & Business Age
| Credit Score | New Business (<2 years) | Established (2-5 years) | Mature (5+ years) |
|---|---|---|---|
| 720+ | 12% - 18% | 8% - 14% | 6% - 12% |
| 680-719 | 16% - 22% | 12% - 18% | 8% - 16% |
| 640-679 | 20% - 28% | 16% - 24% | 12% - 20% |
| 600-639 | 24% - 35% | 20% - 30% | 16% - 26% |
| Below 600 | 30%+ or declined | 25% - 40% | 20% - 35% |
* Rates shown are for term loans and lines of credit. SBA loan rates are typically 2-4% lower due to government backing.
** Additional factors affecting rates: annual revenue, debt-to-income ratio, industry type, collateral, and lender relationships.
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How to Use This Business Loan Calculator
Our free business loan calculator helps you estimate monthly payments, total costs, and determine if you qualify based on your Debt Service Coverage Ratio (DSCR). Enter your desired loan amount, interest rate, and term to compare different financing options.
Understanding Debt Service Coverage Ratio (DSCR)
DSCR measures your business's ability to service its debt obligations. It's calculated by dividing your net operating income by your total annual debt payments. Most lenders require a minimum DSCR of 1.25x, meaning your income should be 25% higher than your debt obligations.
Which Business Loan Type Is Right for You?
- SBA 7(a) Loans: Best for working capital, equipment purchases, and real estate. Lower rates due to government guarantee, but longer approval process.
- SBA 504 Loans: Ideal for real estate and equipment purchases. Fixed rates and long terms, but requires 10% down payment and owner-occupancy.
- Term Loans: Traditional bank financing for established businesses. Faster approval than SBA loans but higher rates.
- Lines of Credit: Flexible financing for cash flow management. Only pay interest on amount used, but typically higher rates.
- Equipment Financing: Equipment serves as collateral, leading to lower rates. Terms typically match equipment's useful life.
Factors That Affect Your Business Loan Rate
- Personal Credit Score: Most important factor. Scores above 720 qualify for the best rates.
- Business Age: Established businesses (2+ years) get better rates than startups.
- Annual Revenue: Higher revenue demonstrates ability to repay, leading to lower rates.
- Cash Flow: Positive, consistent cash flow improves loan terms.
- Industry Type: Some industries are considered higher risk and may face higher rates.
- Collateral: Secured loans typically offer better rates than unsecured options.
Small Business Lending Statistics (2026)
According to the Federal Reserve's Small Business Credit Survey, 43% of small businesses applied for financing in 2025. The average business loan amount was $663,000, with approval rates varying by lender type: large banks (24% approval), small banks (62% approval), and online lenders (77% approval but at higher rates).
Frequently Asked Questions
What is the difference between SBA 7(a) and SBA 504 loans?
SBA 7(a) loans are more flexible and can be used for working capital, equipment, and real estate, with terms up to 25 years. SBA 504 loans are specifically for real estate and equipment purchases, offer fixed rates, require 10% down, and the property must be owner-occupied.
What credit score do I need for a business loan?
Most lenders require a personal credit score of 600-650 minimum for business loans. However, to qualify for the best rates (under 10%), you typically need a score of 720 or higher. SBA loans may accept lower scores with other strong qualifications.
How is DSCR calculated and why does it matter?
DSCR (Debt Service Coverage Ratio) is calculated by dividing your annual net operating income by your total annual debt payments. A DSCR of 1.25x means your income is 125% of your debt obligations, providing a 25% cushion. Most lenders require 1.25x minimum.
Can I get a business loan for a startup with no revenue?
It's challenging but possible. Startup loans typically require excellent personal credit (720+), significant down payment, detailed business plan, and personal guarantees. Consider SBA microloans, equipment financing, or business credit cards as alternatives.
What documents do I need to apply for a business loan?
Common requirements include: business and personal tax returns (2-3 years), financial statements, bank statements (3-6 months), business plan, personal financial statement, business license, and legal documents (articles of incorporation, etc.).
How long does it take to get approved for a business loan?
Approval times vary by lender and loan type: online lenders (1-7 days), traditional banks (2-6 weeks), SBA loans (60-90 days). Having complete documentation ready can significantly speed up the process.
Should I use business assets or personal assets as collateral?
Business assets are preferable as they limit personal risk. However, startups and smaller loans often require personal guarantees. Equipment financing uses the equipment as collateral, which can offer a good middle ground with competitive rates.
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