This total cost of funding calculator from Mesaside Advances, a small-business funding broker in Cheyenne, Wyoming, works out a loan's monthly payment, total interest and total paid back from the amount, rate and term, and shows how to add fees by hand for the full cost in dollars. Results are illustrative arithmetic, not an offer; lending partners set actual terms.
How interest is calculated on a business loan
The calculator assumes a standard amortizing loan: equal monthly payments, with interest charged each month on the balance still owed. The monthly payment comes from the usual amortization formula, using the annual rate divided by twelve and the number of months. Total interest is the payment times the number of months, minus the amount borrowed. Total paid back is the payment times the number of months.
- Monthly payment = amount × r ÷ (1 − (1 + r)−n), where r is the annual rate ÷ 12 ÷ 100 and n is the number of months
- Total interest = monthly payment × n − amount
- Total paid back = monthly payment × n
Step two: add the fees by hand
Fees are where many offers differ most, and the calculator leaves them out. Take the offer's fee list and do two things:
- Subtract any fee deducted at closing from the amount to get net proceeds, the money that actually reaches your account.
- Add every fee charged at closing or later to the total interest to get the total cost in dollars.
Compare offers on total cost and net proceeds together. An offer with a lower payment but a large deducted fee can leave you with less money for more cost. Business funding fees explained lists the fees to look for.
Which number goes in which box
| Box | What to enter | Where to find it |
|---|---|---|
| Amount | The full loan amount on the offer | The offer or note |
| Interest rate | The annual note rate, not the APR | The offer or note |
| Term | The number of monthly payments | The payment schedule |
If the offer takes weekly or daily payments, the monthly figure is only an approximation; ask for the full schedule and add it up directly.
Why your result may differ from the offer
- Fees, as above
- Payments that are weekly or daily rather than monthly
- Interest calculated on the original amount rather than the falling balance
- A balloon payment at the end, which this calculator does not model
- A variable rate that changes during the term
Using the result
Check the payment against your slowest month, not your average one. If the payment fits and the total cost is acceptable for what the money will do, the offer is worth reading in full. For merchant cash advances, which are not loans, use the MCA cost comparison estimator instead. See also how business term loans work and how a request moves; more tools are in the resources section.
By Mesaside Advances · Updated