Short Term Loan Calculator

How to Use Short Term Business Loan Calculator

Estimate Monthly Payment

To make the best use of our short-term business loan calculator, you'll need a few additional pieces of information. The calculator requires the following:

Amount that you're seeking
Loan term
Interest rate
Origination fee

You will see estimated monthly payments, origination fee, and total repayment as outputs.

Estimate How Much You May Qualify For

You can also estimate how much you may qualify for if you take out a short-term business loan. Once you fill out your information, the calculator will give you a range of dollar figures within which you may be able to borrow. This will give you an idea of the types of expenses you may cover and whether or not you might need to seek additional financing elsewhere. The inputs for this calculator include:

Business Start Date

This is the month and year your business officially started operations.

Annual Revenue

This refers to the total amount of money your business makes during a 12-month period.

Last Month's Deposits

Last month's deposits show how much money you deposited into your business bank account in the previous month.

Estimated Credit Score

This is where you select your business' estimated credit score.

Terms and Explanation

Here are the essential pieces of information you'll need to enter and notice as outputs on our short-term loan calculator.

Amount Seeking

Here you enter the amount of money you'd like to borrow. Loan terms for short-term business loans vary, but typically start at $5,000 and may go as high as $750,000.

Loan Term

The term of your loan is how long you have to repay it. In general, short-term business loans come with repayment terms of 12 months or less.

Annual Rate

Annual rate refers to the yearly total price you'll pay to borrow money. Keep in mind that short-term business loans usually have higher interest rates than longer-term loans.

Origination Fee

An origination fee is a fee lenders charge to process and approve your short-term business loan application. Origination fees are typically calculated as a percentage and range between 0.5% to 5% of the total loan amount.

Estimated Monthly Payment

Estimated monthly payment is the amount of money you'll pay every month to repay your short-term business loan.

Total Repayment

Total repayment will give you a good idea of your overall cost of borrowing. It includes principal, interest, and fees. It assumes you will make each monthly payment as agreed (no more and no less) until the end of the loan.

How to Calculate Payments for Short Term Loans

Short term loans can help keep your business out of hot water with access to working capital when you need it. Our short term loan calculator accounts for the primary factors that influence payments—loan amount, interest rate, loan term, and collateral—to give you a sense of the monthly payments your business will owe.

1. Short Term Loan Amounts

Your short term loan amount will be determined by your business revenue, business history, credit score, and experience in your field, as well as how you plan to use the loan. You can finance as little as $2,500 or as much as $250,000.

2. Short Term Loan Interest Rates

Interest rates for short term loans average between 8% and 13% and are typically fixed. Fixed rates are awesome because they stay consistent throughout the life of the loan, so you always know exactly how much your payment will be. As with most interest rates, a solid credit score helps—the higher your score, the lower your interest rate will likely be.

3. Short Term Loan Terms

Short term loans have, you know, shorter terms in comparison to other loans. Most of them are one to five years and are backed by collateral, such as a vehicle, property, or another tangible asset. Putting up more collateral often helps you get a better deal on your loan.

Let's Get Specific (About Your Rates and Terms)

Instead of spending a day googling rates that may or may not apply to you, take 15 minutes to find out the exact products and rates your business qualifies for. Our single application gives you access to 75+ lenders.

Get Started

How to Reduce Short Term Loan Cost

Make minimum payments on time every month. You'll avoid late fees and boost your credit score.
If you think you are going to miss a payment, talk to your lender about it in advance. Many lenders appreciate proactive communication and may offer flexibility.
Schedule automatic payments. If you like to make payments manually, set calendar reminders so you never forget or miss a payment.
Find out where your lender stands on early payment. Some lenders will offer you a modest discount for paying off your loan early, while others may implement prepayment penalties. Before you rush to make advance payments, ask your lender about any potential penalties and discounts that apply to your short term loan.

FAQs

Short term loans are calculated using a standard amortization formula that considers the principal amount, interest rate, and loan term. The formula calculates how much of each payment goes toward interest versus principal, ensuring the loan is fully paid off by the end of the term. Interest is typically calculated monthly on the remaining balance.

For a six-month loan, divide the annual interest rate by 12 to get the monthly rate, then apply it to your remaining balance each month. For example, a $10,000 loan at 12% APR would have a 1% monthly rate. Each month, you'd pay interest on your current balance, with more of each payment going toward principal as the balance decreases.

Qualification amounts depend on several factors including your business revenue, time in business, credit score, and industry. Generally, businesses can qualify for short-term loans ranging from $5,000 to $500,000. Most lenders look for at least $10,000-$15,000 in monthly revenue and 6+ months in business as minimum requirements.

Short term loans have higher APRs because the interest rate is annualized, but the loan is paid off much faster. A 1.3 factor rate on a 6-month loan translates to a high APR when expressed annually. However, the actual cost in dollars is often reasonable because you're only paying interest for a short period. It's more useful to compare total cost of borrowing rather than APR for short-term products.

Revenue-based financing and merchant cash advances are typically the easiest short-term financing options to qualify for. These products focus primarily on your business revenue rather than credit score. If you have consistent bank deposits and at least 6 months in business, you may qualify even with challenged credit. ACH loans and invoice factoring are also accessible options for businesses with regular cash flow.