Business Loan Calculator (Canada): Monthly Payment, Interest and Total Cost
Enter the amount, the interest rate and the term and this calculator shows your monthly payment, the total interest you will pay and the total cost of the loan. Switch the comparison on to see the same amount as a merchant cash advance side by side. Nothing here is recorded and nothing affects your credit.
Business loan
Merchant cash advance
Loan figures assume a fixed rate and equal payments over the full term (standard amortisation). MCA figures are fixed-cost estimates; the repayment time assumes steady sales. Your actual offer depends on underwriting.
Check my eligibilityHow to read the results
The payment figure is what you would hand over every month (or every two weeks, or every week) for the whole term. Total interest is the price of the loan in dollars. Total repaid is principal plus interest. Two things move the cost more than anything else: the rate, obviously, and the term. A longer term lowers the payment but raises the total interest, because you are renting the money for longer. A $50,000 loan at 9% costs about $7,200 in interest over three years and about $12,300 over five.
What rate should you enter?
If you have an offer in hand, use it. If you are estimating, ISED’s 2023 Survey on Financing and Growth of SMEs found Canadian small businesses paid an average of 9% on term loans, 11% on lines of credit and 19% on business credit cards. Strong borrowers with security get less; newer businesses and unsecured products cost more. A Canada Small Business Financing Program loan is capped at the lender’s prime rate plus 3% for variable-rate loans, with a 2% registration fee on top. Our guide to business funding in Ontario walks through the main lenders and programs.
Why compare with a merchant cash advance?
Because the two products are priced in different units and it is easy to compare them wrongly. A loan has an interest rate on a declining balance. A merchant cash advance has a fixed factor rate on the amount advanced, repaid as a percentage of sales with no fixed term. The comparison toggle puts both in dollars and gives an approximate annualised cost for the advance so you can see what you are paying for speed and accessibility. The honest summary: if a bank will lend to you at 9% on your timeline, the loan is cheaper. The advance exists for when the bank will not, or cannot do it fast enough. Our MCA vs business loan guide covers the decision in full, and the MCA calculator models the advance side in more detail.
What the calculator does not include
- Set-up, registration or legal fees charged by the lender.
- Variable rates. If your rate floats with prime, your payment will change over the term.
- Prepayment. Most Canadian business loans allow some prepayment; some charge a penalty. Ask.
- Tax. Interest on a business loan is generally deductible as a business expense; the cost of a merchant cash advance is generally deductible too. Confirm with your accountant.
Frequently asked questions
How is a business loan payment calculated?
With the standard amortisation formula: payment = P × i ÷ (1 − (1 + i)−n), where P is the principal, i is the interest rate per payment period and n is the number of payments. This calculator uses that formula.
What is the average business loan interest rate in Canada?
About 9% for term loans and 11% for lines of credit in 2023, according to ISED. Business credit cards averaged 19%.
Is a merchant cash advance cheaper than a business loan?
Almost never on price. An MCA costs more and is chosen for speed, approval odds and flexible repayment rather than cost. See what a merchant cash advance costs.
Does using this calculator affect my credit score?
No. Nothing is submitted or recorded.
Can I get a business loan with bad credit in Canada?
From a bank, it is difficult. Revenue-based products such as a merchant cash advance approve on sales rather than credit score. See business funding with bad credit in Canada.
Need the money faster than a bank can move? Magical Business funds Ontario businesses up to $300,000 within 24 hours of approval. See who qualifies or check your eligibility in two minutes.