Estimate the blended monthly payment, total interest and total cost of a business term loan, including upfront fees.
Use this calculator for a blended-payment term loan, where every monthly payment is the same and the share going to interest falls over time. Enter the amount you would borrow, the annual rate on the offer, the amortization (how long the payments run) and the fees you pay yourself at closing.
How it works. The payment is P x r / (1 - (1 + r)^-n), where P is the loan amount, r is the annual rate divided by 12 and n is the number of months. Interest is assumed to compound monthly, which is common for Canadian business term loans; check your loan agreement, because the Interest Act requires the annual rate to be stated and the compounding method shapes the true cost. Fees are added to the total paid but not to the balance.
Worked example (illustrative). $150,000 at 8.5% over 5 years gives a payment of about $3,077 a month and about $34,650 of interest. Add $2,500 of fees and the total paid is about $187,150. Stretching the same loan to 7 years cuts the payment to about $2,375 but raises interest to about $49,540.
Limits. A floating rate tied to prime will change the payment whenever prime moves; this tool assumes one rate for the whole period. Many Canadian term loans, including many from BDC and under the CSBFP, use fixed principal payments instead: use the fixed-principal calculator for those. Defaults are illustrative, not current rates.
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