How To Use This Business Loan Calculator
The calculator updates as you type, so you can test different offers in seconds.
- Enter the loan amount. Use the amount the lender is offering, or the amount you plan to request.
- Pick a term and how often you'll pay. Choose a term from 6 to 120 months, and monthly, bi-weekly or weekly payments. Online lenders often take weekly payments; banks usually take monthly ones.
- Enter the interest rate. Use the rate on your offer. If you don't have one yet, the rate hint shows today's prime rate as a starting point.
- Add the origination fee, if there is one. Enter it as a percentage of the loan. Leave the field empty if your offer has no fee.
- Review your estimate. You'll see your payment, the total interest, the fee, the cost of borrowing, the APR with fees and the total you'll repay. The tables under the calculator compare terms and show how your balance goes down.
If the numbers work for your cash flow, use the "See if you qualify" button to compare business financing options. It won't affect your credit score.
How Business Loan Payments Are Calculated
A business term loan is repaid in equal payments. Each payment covers that period's interest, and the rest pays down the balance. The calculator follows these steps:
- Payment = P × r × (1 + r)n ÷ ((1 + r)n - 1), where P is the loan amount, r is the annual rate divided by the number of payments per year (12, 26 or 52), and n is the total number of payments.
- Total interest = payment × number of payments - loan amount.
- Fee = loan amount × fee percentage. Most lenders take it from the money they send you, so you receive less than you repay on.
- Cost of borrowing = total interest + fee.
- APR with fees = the yearly rate at which your payments repay what you actually receive (the loan minus the fee). With no fee, it equals the interest rate.
Example: Borrowing $50,000 for your business at 10% for 36 months costs about $1,613.36 a month, with $8,080.94 in interest, or $58,080.94 in total. Add a 2% origination fee and you receive $49,000, the cost of borrowing rises to $9,080.94, and the APR becomes about 11.39%.
What An Origination Fee Does To Your Rate
A fee is paid once, up front, but you feel it as a higher rate. The shorter the loan, the bigger the jump, because the fee is spread over fewer payments. For a $50,000 loan at 10%:
| Origination fee | You receive | APR over 12 months | APR over 36 months |
|---|---|---|---|
| None | $50,000 | 10% | 10% |
| 1% | $49,500 | 11.9% | 10.69% |
| 2% | $49,000 | 13.84% | 11.39% |
| 3% | $48,500 | 15.8% | 12.11% |
| 5% | $47,500 | 19.81% | 13.56% |
On a one-year loan, a 3% fee adds almost 6 points to a 10% rate. When two lenders quote the same rate, the one with the lower fee is cheaper; when one quotes a lower rate and a higher fee, compare the APR with fees for the term you'll actually keep the loan. If your lender adds the fee to the balance instead of taking it from the funds, enter the loan amount with the fee included to see the payment.
Business Loan Rates In Canada
Most bank and credit union business loans are priced from the prime rate (4.45% at Canada's big banks in October 2026) plus a margin that depends on your revenue, time in business, credit and security. Online and alternative lenders approve more businesses, faster, but charge more. Here's what the rate means for a $50,000 loan over 36 months:
| Interest rate | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 7% | $1,543.85 | $5,578.77 | $55,578.77 |
| 10% | $1,613.36 | $8,080.94 | $58,080.94 |
| 15% | $1,733.27 | $12,397.59 | $62,397.59 |
| 25% | $1,987.99 | $21,567.69 | $71,567.69 |
| 35% | $2,261.80 | $31,424.87 | $81,424.87 |
Two rules set the limits:
- The criminal interest rate. Since January 1, 2025, a business loan of more than $10,000 and up to $500,000 to a corporation (not a sole proprietor) can't carry an APR above 48%, fees included. Loans of $10,000 or less, and loans to sole proprietors, are capped at 35% like consumer loans. Loans over $500,000 to a business have no cap. That's why the calculator stops at 48%.
- The Canada Small Business Financing Program (CSBFP). For government-backed loans through participating banks and credit unions, the variable rate can't exceed the lender's prime rate plus 3%. There's a 2% registration fee, which can be added to the loan. Businesses with gross revenue of $10 million or less can borrow up to $1 million in term loans. See the program's FAQ and our guide to government financing for businesses.
How The Term Changes What You Pay
A longer term lowers the payment and frees up cash flow, but the interest adds up. For $50,000 at 10%:
- 12 months: $4,395.79 a month, $2,749.53 in interest
- 36 months: $1,613.36 a month, $8,080.94 in interest
- 60 months: $1,062.35 a month, $13,741.13 in interest
- 84 months: $830.06 a month, $19,724.97 in interest
Match the term to what you're financing: short terms for inventory or a seasonal gap, longer ones for equipment or a renovation that pays off over years. Paying the loan off with the money it helps you earn is the goal. For ongoing, uneven needs, a business line of credit can cost less, because you only pay interest on what you use.
Business Loan Or Merchant Cash Advance?
A merchant cash advance (MCA) is easier to get than a term loan, but it's priced with a factor rate instead of an interest rate, and it's repaid from your daily card sales. A $50,000 advance at a 1.3 factor rate costs $15,000. Repaid from 15% of $60,000 in monthly card sales, that's about 7 months, or roughly 90.9% a year as an APR. The same $50,000 as a one-year loan at 20% costs $5,580.70 in interest. Run your own numbers in our merchant cash advance calculator, and see merchant cash advance vs. business loan.
Ways To Lower The Cost Of A Business Loan
- Start with your bank or credit union. They're usually the cheapest lenders, and a CSBFP loan caps the rate at prime plus 3%.
- Ask for the APR with fees in writing. Then compare every offer over the same term, in the calculator above.
- Negotiate the fee. An origination or processing fee is often easier to reduce than the rate, and on a short loan it matters more.
- Offer security. Equipment, receivables or real estate can lower your rate; a personal guarantee may be required either way. Read what you're signing.
- Build your business credit. Lenders look at your business credit score, your personal score and your financial statements. Clean books get better offers.
- Check for prepayment penalties. If you expect to pay early, a loan without one can save you interest.
Ready to compare lenders? See our picks for the best small business loans in Canada, and what you need to apply.