Commercial Loan Calculator

Category: Other Finance
- June 10, 2025
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Calculate payments, amortisation schedules, and analyse commercial loan terms. This calculator helps business owners, real estate investors, and financial professionals evaluate commercial financing options including SBA loans, conventional commercial loans, and equipment financing.

Loan Details

$
%
Period over which loan is calculated to be paid off

Additional Costs & Fees

$
Appraisal, legal, title, etc.

Property & Income Analysis

$
$
Net operating income for property or business revenue
x
Debt Service Coverage Ratio (typically 1.15-1.35)
%
Loan-to-Value ratio

Advanced Options

Commercial Loan Fundamentals

Commercial loans are financing solutions designed for business purposes, including real estate investment, equipment purchases, and business expansion. Understanding the key metrics and qualification criteria is essential for successful commercial financing.

Key Commercial Loan Metrics
  • Debt Service Coverage Ratio (DSCR): Net operating income divided by total debt service
  • Loan-to-Value (LTV): Loan amount as a percentage of property value
  • Debt-to-Income (DTI): Total monthly debt payments divided by monthly income
  • Cash-on-Cash Return: Annual cash flow divided by initial cash investment
  • Capitalisation Rate: Net operating income divided by property value
  • Break-Even Ratio: Operating expenses plus debt service divided by gross income
Commercial Loan Types
  • Conventional Commercial: Traditional bank loans with competitive rates
  • SBA 504: Long-term, fixed-rate financing for real estate and equipment
  • SBA 7(a): Flexible financing for various business purposes
  • Equipment Financing: Secured loans for business equipment purchases
  • Construction Loans: Short-term financing for development projects
  • Bridge Loans: Temporary financing between transactions
Qualification Factors
  • Credit Score: Personal and business credit history
  • Cash Flow: Consistent income to support debt payments
  • Down Payment: Typically 15-30% of purchase price
  • Experience: Industry and management experience
  • Collateral: Assets to secure the loan
  • Financial Statements: Business and personal financial documentation

Disclaimer: This calculator provides estimates for educational and planning purposes only. Actual loan terms, rates, and qualification requirements may vary significantly based on creditworthiness, property type, market conditions, and lender policies. Consult with qualified commercial lending professionals for specific financing advice and current market rates.

What Is the Commercial Loan Calculator?

The Commercial Loan Calculator is a powerful payment planning tool designed to help business owners, property investors, and Financial professionals estimate payments for various types of commercial financing. It covers loans such as SBA 504, SBA 7(a), equipment financing, and conventional commercial loans.

This tool makes it easy to calculate monthly loan payments, analyse amortisation schedules, and assess affordability using key financial ratios like DSCR (Debt Service Coverage Ratio) and LTV (Loan-to-Value).

Key Features

  • Monthly Payment Tool: Instantly get a monthly payment estimate based on loan terms.
  • Amortisation Schedule: View payment breakdown over time—principal vs. interest.
  • Qualification Analysis: See if your loan meets standard underwriting guidelines.
  • Scenario Comparison: Evaluate different loan options side by side.
  • Cash Flow & Tax Insights: Review profitability and potential tax savings.

How to Use the Calculator

  1. Enter the loan amount and choose the type of loan (e.g., SBA 504 or Equipment Financing).
  2. Input the interest rate, loan term, and amortisation period.
  3. Add optional details like origination fees, closing costs, or balloon payments.
  4. Enter property value and annual income to check against target LTV and DSCR.
  5. Click “Calculate Loan Payment” to view results.

Why It’s Useful

Understanding your potential loan obligations is essential for smart business planning. This calculator helps you:

  • Visualise monthly payments before committing to a loan.
  • Estimate upfront costs like down payments and fees.
  • Check affordability using DSCR and LTV metrics.
  • Project long-term financial impact with a full amortisation table.

Whether you're evaluating a new commercial property or financing equipment, this tool simplifies the Math so you can focus on strategy.

Commercial Loan Payment Formula

Monthly Payment = P × [ r(1 + r)n ] / [ (1 + r)n - 1 ]

Where:

  • P = Loan principal (amount borrowed)
  • r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
  • n = Total number of payments (months)

Frequently Asked Questions (FAQ)

What types of loans does this calculator support?

It supports a range of business financing options, including conventional commercial loans, SBA 504 and 7(a) loans, equipment financing, bridge loans, construction loans, and hard money loans.

How accurate are the estimates?

The results are designed for estimation and planning purposes. Actual terms may vary depending on lender policies, credit score, and current market conditions.

Can I include balloon payments?

Yes, you can enable a balloon payment option and select the year when the payment will be due. The calculator adjusts the schedule and payment accordingly.

What do DSCR and LTV mean?

DSCR (Debt Service Coverage Ratio) measures your ability to pay loan obligations based on income. LTV (Loan-to-Value) compares the loan amount to the property's value—used by lenders to assess risk.

Does it show the impact of fees?

Yes, you can enter origination fees, closing costs, and prepayment penalties. The calculator includes these in total cost estimates and cash required at closing.

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