Business Loan Calculator
Calculate business loan repayments and check them against your cash flow.
Please note: An estimate, not a credit decision. Business lending is underwritten on trading history, security and any personal guarantee you give — a guarantee can put your own assets behind the debt, and none of that is modelled here.
What the Business Loan Calculator does
Business lenders care less about the payment itself and more about whether your operating income comfortably covers it. The debt service coverage ratio divides net operating income by the loan payment; most lenders look for at least 1.25.
Formula
Payment = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1)DSCR = Net operating income ÷ Debt service
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Loan amount | selected currency | Yes | Accepts more than 0. |
| Annual interest rate | % | Yes | — |
| Loan term | years | Yes | Accepts 0 or more, up to 30. |
| Monthly net operating income | selected currency | Optional | Optional — used to check the coverage ratio. Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Loan amount, Annual interest rate and Loan term.
- Optionally add Monthly net operating income.
- Select Calculate.
Worked example
A $150,000 loan over 5 years at 9%, with $8,000 monthly operating income.
- Amount
- 150000
- Rate
- 9
- Term
- 5
- Monthly NOI
- 8000
Payment $3,113.94, DSCR 2.57× — comfortably serviceable.
Frequently asked questions
What DSCR do lenders want?
Typically 1.25 or higher, meaning income exceeds the payment by 25%. Below 1.0 the business cannot cover the loan from operations.
Method and sources
Method. Payment uses the standard amortizing-loan formula. DSCR (debt service coverage ratio) divides net operating income by the loan payment — the ratio lenders themselves compute to assess whether a business’s cash flow covers the debt, not a proxy for it.
Assumptions
- Net operating income, if entered, is treated as stable across the term — real business income fluctuates, especially seasonally.
Limitations
- Business lending is underwritten on trading history, security and any personal guarantee, none of which this calculator sees. A DSCR above a lender’s minimum does not by itself mean approval.
- No published lender threshold for DSCR is used; 1.25 is cited in the explanation as commonly referenced, not as a rule this calculator enforces or verifies.