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Page written by Ashlyn Brooks. Last reviewed on March 11, 2026. Next review due October 1, 2027.
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Borrow $Looking to get funding for your business? Business loans are one of the most common ways that SMEs get the cash flow to get started or keep up with growth. Here at Swoop, we prioritize transparency so you know as much as possible about the funding options available and what they all include. Check out our business loan calculator for an estimate of your monthly payments, interest, and more.
A business loan calculator is a financial tool designed to help business owners estimate the costs associated with borrowing funds. With the Swoop business loan calculator, you can simplify complex loan calculations and get clear repayment estimates based on the information you provide. We ask for things like estimated loan amount, interest rate, and loan repayment term to give you what you need to be in the know about your loan cost.
To use our business loan calculator you enter your loan amount, the length of the loan (loan term), and the interest rate. Once you’ve made your input our calculator provides the associated loan costs such as the monthly interest, monthly payment, and total interest for the loan term, this process is great for getting a full visual of what a loan could cost you in the long term.
There’s a bit of math that goes into a loan calculation, including combining several financial factors, such as; the loan amount, interest rate, and loan term. Lenders use an amortization formula or a reducing balance method to determine monthly repayment amounts. Typically the calculation breaks down each repayment into principal and interest, allowing borrowers to see how much of each payment goes toward reducing the loan balance and how much covers interest charges.
If the loan has a fixed interest rate, the monthly repayment amount stays constant throughout the loan term.
A simple interest or compound interest method is used on a business loan to calculate interest. This of course depends on the loan terms set by the lender.
With simple interest, the lender charges interest only on the original loan amount throughout the loan term. This is calculated using a formula where the principal amount is multiplied by the annual interest rate and loan duration.
On the other hand, compound interest involves calculating interest not only on the original loan amount but also on any accrued interest from previous periods. As you can see, this method isn’t ideal since it leads to higher overall interest costs, especially for longer-term loans. Ideally, you’d like to look for low-interest business loans from the start and pay less back in interest costs.
Educating yourself on the factors that go into a loan and the cost of obtaining one is very important for both eligibility and staying within your means. Being proactive with the costs can help you know what you can comfortably afford and factor it into your application decisions.
You always want to consider need and affordability before eligibility. You may be eligible for a much higher loan than you’re comfortable repaying.
Start by looking at your business’s annual revenue. Lenders have a habit of basing loan amounts on a percentage of this figure. Next, check your debt-to-income ratio to see how much of your income is already committed to repaying existing debts. This helps determine how much more debt your business can handle comfortably.
You’ll also want to review your credit score since a strong score shows lenders that you’re a trustworthy borrower. If your loan request is substantial, be prepared to offer collateral, such as equipment or property, to secure the loan. Lastly, take a close look at your business’s cash flow projections to estimate how much extra income you’ll have available each month for repayments.
Of course, this is a generalized approach, there’s no exact universal science since each lender has their own way of determining candidate creditworthiness and what they are eligible for in terms of borrowing power.
Let’s look at an example of these steps in action.
| Credit score | Debt to income | Maximum loan amount |
|---|---|---|
| High (800) | Low (20%) | $240,000 |
| High (800) | High (50%) | $150,000 |
| Average (650) | Low (20%) | $160,000 |
| Average (650) | High (50%) | $100,000 |
Here we have a fictional business, “Summit Tech Solutions,” with annual revenues of $500,000. Initially, Summit Tech had a strong debt-to-income (DTI) ratio of 20% and an excellent credit score of 800. With these favorable conditions, lenders would likely offer a maximum loan of $240,000 — almost half the company’s annual revenue. This is because the business demonstrates low financial risk due to its strong credit history and manageable existing debt.
Now, see what happens if the company’s DTI rises to 50% due to increased liabilities. Even with the same high credit score, lenders would adjust the loan offer down to $150,000. The higher DTI signals that a significant portion of the company’s income is already committed to existing debt, making it a riskier borrower.
Next, imagine that Summit Tech’s credit score drops to an average level of 650 while maintaining a low DTI of 20%. Despite showing good debt management, lenders would still view the company as less creditworthy due to its lower credit score. As a result, its maximum loan offer would be reduced to $160,000.
Finally, consider the worst-case scenario: a DTI of 50% and an average credit score of 650. In this situation, Summit Tech would likely be approved for only $100,000 — less than half of its initial borrowing potential.
Growth is a challenge but a welcomed one when looking at your funding options in the realm of loans, luckily, you have a handful to select from. Here are five common business loans to consider:
Business loans may not be the best option for every business. You may want to explore alternative options before pulling the trigger on a loan given your circumstances. Here are some ideas to mull over.
Swoop simplifies the business funding process by offering tailored financial solutions designed to meet your unique needs. Our platform connects businesses with a vast network of lenders, enabling you to explore multiple loan options in one convenient place.
By entering a few key business details, you can compare interest rates, loan terms, and repayment amounts, helping you identify the most suitable funding product. Beyond lending, Swoop’s expert advisors provide personalized support, guiding you through the application process and ensuring that you submit a compelling loan application. Whether you need working capital, equipment financing, or expansion funds, Swoop’s platform delivers fast and transparent funding solutions.
Ready to take the next step? Check available loans today and unlock the right financial solution for your business.
Disclaimer: Swoop Funding LLC (“Swoop”) is a financial technology platform and commercial finance broker, not a lender. Swoop does not provide loans or make credit decisions. We match US-based firms with third-party lenders, equity funds, and grant agencies. All financing is subject to lender credit approval and the specific terms and conditions of the funding provider.
Broker Compensation Disclosure: Swoop provides its platform and matching services to applicants at no direct cost. We receive compensation in the form of a commission or referral fee from the finance providers in our network upon successful placement. This compensation may vary by provider and product. In certain instances, the commission paid to Swoop may influence the interest rate or terms offered by the lender, which can affect the total amount payable under your agreement.
Credit Authorization & FCRA Notice: By submitting an application or registering an account, you provide “written instructions” to Swoop under the Fair Credit Reporting Act (FCRA) to obtain your personal and/or business credit profile from consumer reporting agencies. This information is used solely to evaluate your eligibility for financing and to match you with appropriate lenders in our network.
State-Specific Disclosures:
Florida & Utah: Swoop complies with state commercial financing disclosure laws regarding the transparency of terms for non-real estate secured commercial transactions.
Entity Information: Swoop Funding LLC is a Delaware limited liability company. US Headquarters: 43 W 23rd St, New York, NY 10010, United States. Contact: hello@swoopfunding.com
General Terms: Applicants must be 18 years of age or older. All firms must be registered and operating within the United States. SBA loans are issued by private lenders and guaranteed by the U.S. Small Business Administration; Swoop is not a government agency. Please review our Terms of Use and Privacy Policy for full details.
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