Business Loan Calculator — Monthly Payment, DSCR & Amortization Schedule
Calculate your business loan payment with origination fees, total interest, and cash disbursed. Enter net operating income to get a Debt Service Coverage Ratio with approval likelihood analysis.
Business Loan Calculator
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Debt Service Coverage Ratio (DSCR)
0.39 — Insufficient — Loan payments exceed income. High denial risk.
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Debt Service Coverage Ratio (DSCR)
Loan payments exceed net operating income. High denial risk. Consider reducing loan amount or increasing income.
Monthly NOI
$8,500.00
Min. Required DSCR
1.25 (most lenders)
Monthly Payment
$21,804.95
Total Interest
$11,659.35
Origination Fee
$5,000.00
Cash Received
$245,000.00
Amortization Schedule
12 total payments| Month | Beginning Balance | Payment | Interest | Principal | Ending Balance |
|---|---|---|---|---|---|
| Mo 1 | $250,000.00 | $21,804.95 | $1,770.83 | $20,034.11 | $229,965.89 |
| Mo 2 | $229,965.89 | $21,804.95 | $1,628.93 | $20,176.02 | $209,789.87 |
| Mo 3 | $209,789.87 | $21,804.95 | $1,486.01 | $20,318.93 | $189,470.93 |
| Mo 4 | $189,470.93 | $21,804.95 | $1,342.09 | $20,462.86 | $169,008.07 |
| Mo 5 | $169,008.07 | $21,804.95 | $1,197.14 | $20,607.81 | $148,400.27 |
| Mo 6 | $148,400.27 | $21,804.95 | $1,051.17 | $20,753.78 | $127,646.49 |
| Mo 7 | $127,646.49 | $21,804.95 | $904.16 | $20,900.78 | $106,745.71 |
| Mo 8 | $106,745.71 | $21,804.95 | $756.12 | $21,048.83 | $85,696.88 |
| Mo 9 | $85,696.88 | $21,804.95 | $607.02 | $21,197.93 | $64,498.95 |
| Mo 10 | $64,498.95 | $21,804.95 | $456.87 | $21,348.08 | $43,150.87 |
| Mo 11 | $43,150.87 | $21,804.95 | $305.65 | $21,499.29 | $21,651.58 |
| Mo 12 | $21,651.58 | $21,804.95 | $153.37 | $21,651.58 | PAID OFF |
Payment Breakdown
Of every dollar you repay, 95.5% reduces your balance and 4.5% goes to the lender as interest cost.
The Formula
The standard loan amortization formula calculates your fixed monthly payment. M = monthly payment, P = principal loan amount, r = monthly interest rate (annual rate divided by 12), n = total number of monthly payments. Origination fees and DSCR are separate business considerations that affect overall loan affordability.
Variable Definitions
Monthly Payment
The fixed payment due each month covering both principal and interest portions of the loan.
Principal
The total loan amount borrowed before any fees or adjustments.
Monthly Interest Rate
The annual interest rate divided by 12. This is the periodic rate applied to the outstanding balance each month.
Number of Payments
The full loan term in months. A 5-year loan has 60 payments; a 10-year loan has 120 payments.
Debt Service Coverage Ratio
Net Operating Income divided by Monthly Debt Payment. This is the key metric lenders use to assess whether your business generates enough cash flow to comfortably service the proposed debt.
How to Use This Calculator
- 1
Enter the loan amount you need to borrow for your business.
- 2
Select the loan term — longer terms lower monthly payments but increase total interest paid over the life of the loan.
- 3
Enter the annual interest rate — compare SBA, bank, and online lender rates.
- 4
Add an origination fee percentage if applicable (common with SBA loans and online lenders).
- 5
Optionally enter your monthly Net Operating Income to see your DSCR and assess the likelihood of lender approval.
Common Applications
- Determine whether your business qualifies for an SBA or traditional bank loan by calculating your debt service coverage ratio.
- Compare loan offers from different lenders by evaluating the total cost including origination fees and interest rates.
- Plan business expansion by modeling how a new loan payment fits within your current net operating income and cash flow.
Lenders require DSCR of 1.25+ — it measures how many times your income covers the debt payment
Understanding the Concept
DSCR (Debt Service Coverage Ratio) is the single most important number that lenders evaluate when considering a business loan application. A DSCR of 1.25 means your business earns $1.25 for every $1.00 of debt payment — the minimum most SBA lenders require for approval. A higher DSCR signals stronger cash flow and increases your negotiating power for better rates. Origination fees, while often overlooked, reduce your effective cash received and increase your true cost of capital. A 2% origination fee on a 5-year $250,000 loan at 8.5% raises your effective APRThe total yearly cost of borrowing, including interest and fees, expressed as a percentage of the loan amount. by roughly 0.4-0.5 percentage points, even though the stated rate stays the same.
Frequently Asked Questions
Sources & References
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