🏢 Business Loan Calculator

Term Loans: Lump sum repaid over fixed term (1-10 years). Best for established businesses with predictable revenue.

SBA Loans: Government-backed loans with favorable terms (7(a), 504, microloans). Best for businesses that qualify.

Business Line of Credit: Flexible borrowing up to a limit, pay interest only on what you use. Best for managing cash flow.

Equipment Financing: Loan specifically for purchasing equipment, equipment serves as collateral. Best for manufacturing, construction, medical practices.

Invoice Factoring: Sell unpaid invoices for immediate cash. Best for B2B businesses with slow-paying clients.

Merchant Cash Advance: Advance repaid from future credit card sales. Best for retail, restaurants, but very expensive.

DSCR measures your business's ability to cover loan payments with operating income.

• DSCR > 1.25: Excellent - lenders love this (strong ability to repay)
• DSCR = 1.0 to 1.25: Acceptable - may qualify with strong other factors
• DSCR < 1.0: Problematic - business doesn't generate enough cash flow

How to calculate DSCR:

• Net Operating Income ÷ Total Debt Service = DSCR
• Example: $120,000 NOI ÷ $100,000 debt = 1.20 DSCR

Tip: Most lenders require minimum 1.15-1.25 DSCR for approval. Use our calculator to see your ratio.

Time in business requirements vary by loan type:

• Startup loans: 0-6 months (harder to qualify, higher rates)
• Online lender: 6-12 months minimum
• Bank term loan: 2+ years typically required
• SBA loan: 2+ years preferred, but startups may qualify
• Equipment financing: 1+ years often sufficient

For startups: Consider SBA microloans (up to $50,000), business credit cards, or personal loans. A strong business plan and personal credit help significantly.

Most lenders require these documents (more for larger loans):

• Business documents: Business license, articles of incorporation, EIN
• Financial statements: Profit & loss, balance sheet (last 2-3 years)
• Tax returns: Business and personal (last 2-3 years)
• Bank statements: Business accounts (last 3-12 months)
• Business plan: Especially for startups or large loans
• Collateral documentation: For secured loans
• Personal financial statement: For small business owners

Pro tip: Have these documents ready before you start applying. Organized documentation speeds up approval significantly.

SBA 7(a) Loan (Most common):

• ✓ Up to $5 million
• ✓ Working capital, equipment, real estate, refinancing
• ✓ Variable or fixed rates
• ✓ 10-25 year terms
• ✓ 75-85% guarantee by SBA

SBA 504 Loan (Real estate & equipment):

• ✓ Up to $5.5 million for real estate, $5.5 million for equipment
• ✓ Fixed rates (typically lower than 7(a))
• ✓ 10, 20, or 25 year terms
• ✓ Requires 10% down payment
• ✓ 40% from lender, 50% from CDC, 10% borrower

Use SBA 7(a) for most business needs. Use SBA 504 specifically for buying real estate or major equipment.

Follow these steps to increase approval odds:

• Build business credit: Get a DUNS number, open vendor accounts, pay early
• Improve personal credit: Most small business lenders check personal credit (aim for 680+)
• Increase revenue: Show consistent growth year over year
• Reduce existing debt: Pay down credit cards and other loans
• Prepare documentation: Organized financials speed up process
• Offer collateral: Secured loans are easier to approve
• Start smaller: Request less than you need, prove repayment ability
• Build banking relationship: Use same bank for business accounts

Timeframe: Plan 3-6 months to improve qualifications before applying for best rates.