Business Loan Calculator — Calculations & Slabs for FY 2026-27

An origination fee is an upfront fee charged by lenders to cover the administrative costs of processing and underwriting the loan. It is typically expressed as a percentage of the total loan amount, usually ranging from 1% to 5%. It can either be deducted from your loan proceeds or rolled into the total loan balance.

Making payments more frequently (like weekly or bi-weekly) aligns better with the cash flow cycles of many businesses. Because you make payments more often, you reduce the principal balance faster, which reduces the total interest accrued over the life of the loan compared to standard monthly schedules.

Amortizing business loans calculate interest on the remaining principal balance, meaning the interest portion of each payment decreases over time. Simple interest business loans (common with short-term financing or Merchant Cash Advances) calculate a flat interest charge on the total original loan amount, making them much more expensive.

Deducting the fee from proceeds means you pay interest on a smaller loan, but you receive less cash upfront. For example, on a $100,000 loan with a 3% fee, you receive $97,000 but pay interest on $100,000. Rolling the fee in means you receive $100,000 but finance $103,000, paying interest on that extra $3,000. If you need the exact cash amount for a business purchase, rolling the fee in is often necessary.

Business lenders look at your business credit score, annual revenue, bank statements, time in business (often 1-2 years minimum), and debt service coverage ratio (DSCR). A DSCR above 1.25 indicates that your business generates enough operating income to easily cover its debt obligations.