Cost of capital
Compare business loan offers
Put two offers side by side — different rates, terms, fees and payment schedules — and see which costs less in dollars and per year.
How this is calculated
Total cost = interest + fees · APR = the yearly rate at which the payments are worth the money you receive
Each offer uses the standard amortizing payment for its own term and frequency. The cheaper offer in dollars is not always the one with the lower APR — a shorter loan has less time to build interest.
Worked example
Offer A: $100,000 at 10% over 5 years, monthly, with $3,000 in fees — $2,124.70 a month, $30,482.27 in total cost, 11.32% APR. Offer B: $100,000 at 16% over 2 years, weekly, with $1,000 in fees — $1,125.04 a week, $18,004.34 in total cost, 17.06% APR. B costs $12,477.93 less in dollars but more per year, and its payments are far higher.
Assumptions
- Fixed rates and equal payments; daily means 252 business days a year.
- Fees are paid when each loan funds.
- Prepayment penalties, renewal fees and variable rates are not included.
Questions owners ask
Should I pick the lower APR or the lower total cost?
Look at both, and at the payment. The lower total cost saves money overall; the lower APR is cheaper per year of use. A short, expensive loan can cost fewer dollars but strain cash flow with large payments.
Can I compare a loan with a merchant cash advance?
Use the factor rate calculator to turn the advance into an estimated APR and daily payment, then compare those numbers with the loan here.
What else should I compare?
Prepayment terms, personal guarantees, collateral, how fast the money arrives and what happens if a payment is missed.
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 ↗
03Line of credit or term loan?
Compare a business line of credit vs. term loan by use, payment structure, cost, flexibility and cash-flow fit with practical examples.
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.