How to read the results
The estimated payment is what leaves the account each period: monthly for term loans, SBA loans and equipment financing; weekly for many working capital loans; every business day for a merchant cash advance. Total payback is the payment multiplied by the number of periods, which is the true cost of the money. The "basis" column shows the rate used: an APR for interest-bearing products, a factor for advances, a fee per 30 days for factoring.
Compare products on total payback and on the payment’s fit with your cash flow, not on the headline rate. A 1.30 factor over nine months and a 30 percent APR over three years look similar on paper and are very different in practice: the advance costs less in total dollars but takes three times the monthly cash.
| Product | Default term | Rate basis | Published range |
|---|---|---|---|
| Business term loan | 36 months | APR | 8% – 45% |
| Business line of credit | 12 months drawn | APR on drawn balance | 8% – 60% |
| SBA 7(a) loan | 120 months | APR (prime-based) | roughly 10.5% – 15.5% |
| Equipment financing | 60 months | APR | 6% – 30% |
| Working capital loan | 12 months | Factor rate | 1.10 – 1.40 |
| Merchant cash advance | 9 months, daily | Factor rate | 1.15 – 1.49 |
| Revenue-based financing | 12 months | Payback multiple | 1.10 – 1.40 |
| Invoice factoring | 45 days per invoice | Fee per 30 days | 1% – 5% |
The formulas behind the numbers
For interest-bearing products the calculator uses the standard amortisation formula: payment = principal × r ÷ (1 − (1 + r)^−n), where r is the monthly rate (APR ÷ 12) and n the number of months. Total payback is payment × n. For factor-rate products, total payback = amount × factor, and the payment is that total divided by the number of remittances: about 21 business days a month for daily advances, or the number of months for monthly products. For factoring, the fee is the invoice amount × the monthly fee × days outstanding ÷ 30.
These are the same formulas lenders use for the schedule in an offer. Where an offer differs from the calculator, the difference is usually an origination fee deducted from the disbursement, a shorter or longer term, or a payment frequency that changes how quickly the balance falls.
Worked examples at common amounts
The table shows the midpoint estimate for three products at three amounts. Use it as a sanity check on any offer: if a quote is far outside these bands, ask why.
| Amount | Term loan, 36 mo, 26.5% APR | Working capital, 12 mo, 1.25 factor | MCA, 9 mo daily, 1.32 factor |
|---|---|---|---|
| $25,000 | $1,014/mo · $36,500 total | $2,604/mo · $31,250 total | $175/day · $33,000 total |
| $50,000 | $2,028/mo · $73,000 total | $5,208/mo · $62,500 total | $349/day · $66,000 total |
| $100,000 | $4,056/mo · $146,000 total | $10,417/mo · $125,000 total | $698/day · $132,000 total |
How much payment can the business afford?
Take average monthly revenue, subtract operating expenses to get net cash flow, subtract existing loan and advance payments, then divide by 1.25. That is the payment most term lenders will accept. If the calculator’s payment is above it, reduce the amount, lengthen the term, or improve the rate by strengthening the file. The guide on how much a business can borrow walks through the arithmetic with an example.