Business Loan Calculator (2026) – Compare Loan Options Side-by-Side
Enter one loan amount and two financing scenarios to instantly compare monthly payments, total interest, and total cost. Model SBA vs. conventional, short-term vs. long-term, or any two business loan offers side-by-side before you commit.
How to Use This Business Loan Calculator
Compare any two business loan offers in three steps:
- Enter your loan amount. Both scenarios use the same principal so the comparison is apples-to-apples. If two lenders are quoting different amounts, use the lower figure for a conservative comparison.
- Set up Scenario A. Label it (e.g. "SBA 7(a) Loan"), enter the annual interest rate, and set the term. For a 2026 SBA 7(a) baseline: rate 11.25%, term 10 years.
- Set up Scenario B. Label it (e.g. "Bank Term Loan"), enter its rate and term. Conventional business loans in 2026 typically range from 7%–15% over 3–7 years.
- Click "Compare Loan Costs" and review the winner. The calculator shows monthly payment, total interest, total paid, and a clear dollar-amount savings figure — so you know exactly which option is cheaper and by how much.
Business Loan Types & 2026 Rate Guide
Use these benchmarks to fill in the calculator with realistic numbers before you have a formal lender quote.
SBA 7(a) Loans
- Rate (2026): Prime + 2.25%–2.75% ≈ 10.75%–11.25% variable
- Term: Up to 10 years (working capital/equipment) · Up to 25 years (real estate)
- Max amount: $5,000,000
- Best for: Businesses that qualify for government-backed rates and can tolerate a 30–90 day approval timeline
- Fee: SBA guarantee fee 0.5%–3.5% of guaranteed portion
Conventional Bank Term Loans
- Rate (2026): 7%–15% fixed or variable depending on credit, collateral, and term
- Term: 1–7 years typical; up to 25 years for commercial real estate
- Max amount: Varies widely — $500K–$10M+ for established businesses
- Best for: Established businesses (3+ years, strong revenue) that want faster approval than SBA
- Fee: 1%–5% origination; some have prepayment penalties
Business Lines of Credit
- Rate (2026): 8%–24% depending on lender and creditworthiness
- How it works: Revolving credit limit — draw what you need, pay interest only on drawn amount
- Best for: Managing cash flow gaps, seasonal inventory, or covering payroll during slow periods
- Note: This calculator models term loans, not lines of credit (where interest varies with utilization)
Equipment Financing
- Rate (2026): 6%–14% — secured by the equipment, so rates are often lower
- Term: Matches expected useful life of equipment, typically 3–7 years
- Best for: Purchasing machinery, vehicles, or technology without tying up working capital
- Collateral: The equipment itself serves as collateral — no additional assets required
Worked Example: SBA 7(a) vs. Conventional — $300,000
Here's a real-world 2026 comparison for a small business borrowing $300,000 for equipment and working capital:
| Metric | SBA 7(a) Loan | Conventional Term Loan |
|---|---|---|
| Loan Amount | $300,000 | $300,000 |
| Interest Rate | 11.25% | 13.50% |
| Term | 10 years | 5 years |
| Monthly Payment | $4,175.07 | $6,902.95 |
| Total Interest | $201,008.21 | $114,177.23 |
| Total Paid | $501,008.21 | $414,177.23 |
The conventional loan costs $86,830.98 less in total — but its monthly payment is $2,727.88 higher. If your business can absorb the $6,902.95/month cash outflow, the 5-year conventional loan saves money overall. But if cash flow is tight, the SBA's $4,175.07/month payment may be the only sustainable option — even if it costs more long-term.
The takeaway: always compare both monthly cash flow impact and total cost. Neither metric alone tells the full story.
Frequently Asked Questions About Business Loans
What is the average business loan interest rate in 2026?
SBA 7(a) variable rates run 10.75%–11.25% (Prime + 2.25%–2.75%). Conventional bank term loans for established businesses range from 7%–15% depending on credit, collateral, and term. Online lenders and alternative financing can run 18%–50%+ APR for higher-risk borrowers.
What credit score do I need for a business loan?
SBA 7(a) loans typically require a personal credit score of 650+. Conventional bank loans often require 680–720+. Online lenders may approve scores as low as 550–600 at significantly higher rates. Business credit (Dun & Bradstreet, FICO SBSS) also matters for larger loan amounts.
How long does it take to get a business loan?
SBA loans take the longest: 30–90 days from application to funding. Conventional bank loans typically take 2–4 weeks. Online business lenders can fund in 1–5 business days. SBA Express offers faster SBA turnaround (36-hour decision) for amounts up to $500,000.
Is an SBA loan better than a conventional business loan?
SBA loans usually have lower rates and longer terms — reducing monthly payments. But they require more paperwork, take longer to close, and carry SBA guarantee fees. Conventional loans are faster and simpler but typically more expensive over the loan life. Use this calculator to see the exact cost difference for your scenario — both options can be "better" depending on your cash flow needs.
What types of business loans are available?
Common types: SBA 7(a) (flexible, up to $5M), SBA 504 (fixed assets/real estate), conventional term loans (lump-sum, fixed payments), business lines of credit (revolving), equipment financing (secured by equipment), and invoice factoring (sell outstanding invoices for immediate cash). Each has different rates, terms, and qualification requirements.
How much can I borrow for a business loan?
SBA 7(a) loans go up to $5 million. SBA 504 up to $5.5M+. Conventional bank loans can reach $10M+ for established businesses. Online lenders typically cap at $500,000–$2M. The limit depends on your annual revenue (most lenders cap at 10%–20% of revenue), time in business, and collateral.
Does a shorter loan term always cost less in interest?
Yes — fewer months of interest accruing means lower total interest. However, shorter terms also mean higher monthly payments. A 5-year conventional loan costs less total interest than a 10-year SBA loan — but the monthly payment can be 60%–80% higher. Use this calculator to compare both total cost and monthly cash flow impact before deciding.
What documents do I need to apply for a business loan?
Most lenders require: 2–3 years of business tax returns, 2–3 years of personal tax returns (owners with 20%+ stake), recent bank statements (3–6 months), a current P&L and balance sheet, and a business plan (usually required for SBA). SBA loans also need Form 1919, Form 912, and lender-specific SBA forms.