Business Loan Calculator

How the Business Loan Calculator Works

This business loan calculator helps you estimate your loan payments and total financing costs for various business purposes. Whether you're financing equipment, inventory, expansion, or real estate, understanding your payment obligations helps with cash flow planning and budgeting.

Types of Business Loans in Canada

Term Loans: Traditional fixed-term loans with regular payments. Best for major purchases like equipment, vehicles, or property. Terms typically range from 1-10 years depending on the asset being financed.

Business Lines of Credit: Revolving credit that you can draw from as needed. Interest is only charged on the amount used. Great for managing cash flow fluctuations and seasonal businesses.

Equipment Financing: Loans specifically for purchasing business equipment. The equipment itself serves as collateral, often resulting in better rates. Terms usually match the useful life of the equipment (3-7 years).

Commercial Real Estate Loans: Financing for purchasing or renovating business property. Longer terms (15-25 years) with lower monthly payments. Typically require 20-30% down payment.

Working Capital Loans: Short-term financing (1-3 years) for day-to-day operations, inventory purchases, or bridging cash flow gaps.

Canadian Business Loan Programs

• Canada Small Business Financing Program (CSBFP): Government-backed loans up to $1 million for equipment and property. Competitive rates with up to 80% government guarantee.
• BDC Financing: Business Development Bank of Canada offers flexible loans, including term loans, growth capital, and subordinate financing.
• Export Development Canada (EDC): Financing solutions for businesses involved in international trade.
• Provincial Programs: Many provinces offer loan programs, grants, and loan guarantees for small businesses.

Tips for Getting a Business Loan

• Prepare a solid business plan: Lenders want to see clear projections and how you'll use the funds
• Know your credit score: Both personal and business credit history matter
• Have financial statements ready: Profit & loss, balance sheet, cash flow statements
• Consider collateral: Secured loans typically offer better rates than unsecured
• Shop around: Compare rates from banks, credit unions, BDC, and alternative lenders
• Understand all costs: Look beyond interest rate - consider fees, insurance, and prepayment penalties
• Match term to asset life: Don't finance short-term assets with long-term debt

Business Loan Interest Rates

Business loan rates in Canada typically range from 5% to 20%+ depending on:

• Type of financing (term loan, line of credit, equipment lease)
• Your business credit profile and time in business
• Personal credit score and guarantees
• Collateral and down payment amount
• Industry and business risk profile
• Loan amount and term length
• Current Bank of Canada overnight rate

Tax Considerations

Business loan interest is generally tax-deductible as a business expense, which effectively reduces your cost of borrowing. The principal repayment is not deductible, only the interest portion. Equipment purchases may also qualify for Capital Cost Allowance (CCA) depreciation. Consult with a tax professional for your specific situation.