Find out how much your loan will cost
Taking out a small business loan can help kick start or grow your business, but it is important to know what you're getting into before you borrow money.
Our small business loan calculator will give you an idea of how much it will cost to take out a loan. Adjust the term and add extra monthly payments to see how much of an impact you can have on repayment.
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FAQs
What type of small business loan can I get?
What type of small business loan can I get?
The type of small business loan you can get depends on your individual needs, as well as the type of business you operate. Generally speaking, some of the most common types of small business loans are SBA loans, short-term loans, equipment loans, lines of credit, invoice factoring, and merchant cash advances.
What are typical terms for a business loan?
What are typical terms for a business loan?
Business loan terms can range from as short as one month to years and even decades.
They are dependent on many factors including the loan amount and the lender. Ultimately, it boils down to your financing needs, which will determine the loan type.
Here are some typical business loan types and their terms sorted from the shortest to the longest.
- - Invoice financing: One to three months
- - Short-term loans: Three to 18 months
- - Business lines of credit: Six months to five years
- - Equipment loans: One to five years
- - Microloans: One to six years
- - Term loans: One to ten years
- - SBA loans: Five to 25 years
How long is a typical small business loan?
How long is a typical small business loan?
The business loan term, which is the length of time within which you’re contractually obliged to pay off your debt, depends on whether you’re taking out a short-term or long-term loan.
Short-term loans, which tend to deal with loans of smaller amounts, are usually repaid within 1.5 years. Medium-term loans last between one and five years, and long-term loans can last up to 25 years.
What is a good interest rate for a business loan?
What is a good interest rate for a business loan?
On average, small business loans are applied at an interest rate of between 4% and 6%. However, these rates vary from lender to lender.
- - National banks (large): Between 2.55% and 5.14%
- - National banks (small) and regional banks: Between 2.48% and 5.4%
- - Foreign banks: Between 1.45% and 5.66%
- - Online or alternative lenders: Between 13% and 71%
The standard rates applied by banks lie around 2% to 6%. That said, anything toward the lower end of this range can be considered a good interest rate.
However, applying to a bank that offers low interest rates for business loans does not necessarily guarantee you a low rate. These rates are also determined by factors such as the loan term, the loan amount, and your credit history.
How hard is it to get a small business loan?
How hard is it to get a small business loan?
The success rate for a small business loan application varies from case to case and is also dependent on the lender.
Larger banks have lower approval rates of around 20% to 25%. In comparison, smaller banks approve around 50% of small business loan applications.
Your chances of securing a business loan are also influenced by other factors – principally, your credit report. Any records of late or non-debt payments will lower the likelihood of obtaining a bank loan for your small business.
What are alternative sources of funding?
What are alternative sources of funding?
There are many different money sources you can turn to to get your business up and running. These include:
- - Using your personal savings
- - Asking friends and family for personal loans
- - Getting a business loan from a bank
- - Applying for grants and programs
- - Pitching to venture capital and angel investors
- - Raising money through crowdfunding
What is an equipment loan?
What is an equipment loan?
An equipment loan is a loan taken out to purchase large, expensive pieces of equipment such as machinery, vehicles, or computers. It is typically used by businesses to purchase equipment that is necessary for their operations but that they do not have the funds to purchase outright. It is similar to a regular loan, but the funds are used exclusively to purchase equipment.
Can I get a loan to buy equipment?
Can I get a loan to buy equipment?
Yes, you can get a loan to buy equipment. The type of loan you can get will depend on the type of equipment you need, your credit score, and other factors. You can contact your local bank or credit union to discuss loan options.
What is the best way to get a small business loan?
What is the best way to get a small business loan?
If you’re looking to apply for small business loans that offer relatively shorter application times and higher approval rates, your best options are:
- - Invoice financing
- - Short-term loans
- - Business lines of credit
- - Microloans
However, keep in mind that there may be strings attached to receiving the loan quickly, which can include high rates and fees and less financial flexibility.
Do you have any other tools I can use for free?
Do you have any other tools I can use for free?
Of course! Go to ourtools pageto find more free tools, including: aQR code generator,pay stub generator, andcpm calculator.