What will your business loan cost per month — and how much funding will you actually receive after origination fees?

Origination fees on business loans typically range from 1% to 5% of the loan amount, though alternative or short-term financing products can occasionally reach 8–10%. SBA 7(a) loans cap the upfront guarantee fee (a form of origination-adjacent cost) at 3.5% for loans over $150,000 under current SBA fee schedules — verify current rates on SBA.gov, as fee structures change annually. Commercial bank loans and credit union loans often charge 1–2%. Online business lenders may charge 3–6%. The origination fee is typically deducted from the disbursed amount, so a $100,000 loan with a 3% origination fee means the business receives $97,000 but repays the full $100,000 principal plus interest.

The stated interest rate is the annual rate applied to the outstanding principal balance each month to calculate the interest portion of each payment. The APR (Annual Percentage Rate) includes the stated rate plus certain fees — typically the origination fee — spread over the life of the loan, producing a higher effective annual cost figure. A loan with a 7% stated rate and a 3% origination fee on a 3-year term will have an effective APR of approximately 9–9.5%, depending on exactly how the fee is spread. When comparing multiple loan offers, use APR rather than stated rate for an apples-to-apples comparison.

Repayment terms vary significantly by loan type and purpose. SBA 7(a) loans for working capital typically allow up to 10 years; equipment loans run 5–10 years; real estate loans under SBA 504 programs can extend to 20–25 years. Conventional bank business term loans often use 3–7 year terms. Online and alternative lenders may offer shorter terms of 3–36 months, frequently at higher rates. This calculator supports any term from 3 to 360 months. Shorter terms produce higher monthly payments but lower total interest; longer terms reduce monthly payments but increase total borrowing cost.

If the business needs a net amount after fees, the required loan amount is slightly higher than the target. The formula is: Required Loan Amount = Target Net Amount / (1 - origination_fee_percent / 100). For example, to receive $50,000 net with a 2% origination fee: $50,000 / (1 - 0.02) = $51,020.41. Borrowing $51,020 at 2% fee yields a $1,020.40 fee and $49,999.60 net — effectively $50,000. Recompute with the adjusted loan amount to see the revised monthly payment.