Cost of capital
Business loan APR calculator
Add the fees to the interest rate and get one yearly number you can compare across offers.
How this is calculated
Amount − fees = Σ payment ÷ (1 + i)ᵏ, k = 1…n · APR = i × payments per year
The APR is the yearly rate at which your payments are worth exactly the money you receive after fees. It is found by narrowing in on the rate step by step.
Worked example
$100,000 at 10% for 5 years with $3,000 in fees: the payment is $2,124.70 a month, but you receive $97,000. The rate that makes 60 payments of $2,124.70 worth $97,000 is about 0.943% a month — an APR of 11.32%. The finance charge, interest plus fees, is $30,482.27.
Assumptions
- Fees are paid when the loan funds, so they reduce the money you receive.
- Fixed rate and equal payments; daily means 252 business days a year.
- This follows the common actuarial method. An APR disclosed by a lender can differ because of state rules and which fees are counted.
Questions owners ask
Why is the APR higher than the interest rate?
Fees mean you receive less than you borrow but repay the full amount. The APR spreads that extra cost over the term as a yearly rate.
Which fees should I include?
Anything you must pay to get the loan: origination, underwriting, documentation or closing fees. Leave out costs you can avoid, such as late fees.
Why do short loans with fees have high APRs?
The same fee spread over 6 months instead of 5 years is squeezed into less time, so the yearly cost is much higher.
Read before you borrow
Guides behind the numbers.
01Business loan rates and costs: what you actually pay
Understand business loan rates, APR, factor rates, fees, payment frequency and total repayment so you can compare financing offers accurately.
Read the guide ↗
02How to choose the right financing for the job
Learn how to choose business financing by matching the use of funds, repayment structure, timing and risk to your company’s cash-flow cycle.
Read the guide ↗
03Business loans for bad credit: options, costs and risks
Explore business loans for bad credit, what lenders evaluate beyond scores, realistic financing routes, costs, red flags and an approval-improvement plan.
Read the guide ↗Calculators give estimates for educational purposes only. They are not an offer, approval or commitment to lend. Actual rates, fees, terms and payments are set by independent providers and depend on their review. ScaleKit Financing is operated by Arch Ventures LLC and is not a lender.