Calculate your business loan payment, total interest, and amortization schedule, including an optional balloon payment.
Rates as of Q2 2025 (example)
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This calculator estimates the monthly payment, total interest, and amortization schedule for a business loan, with the option to model a balloon payment - a large lump sum due at the end of the term, which lowers the regular monthly payment but must be paid off or refinanced when due.
This calculator uses the standard loan amortization formula, adjusted for a balloon payment if entered: the present value of the balloon payment is subtracted from the loan amount before calculating the regular payment needed to amortize the remainder over the term, with the balloon itself due as a final lump sum.
Formula: Balloon Amount = Loan Amount × (Balloon % ÷ 100). Present Value of Balloon = Balloon Amount ÷ (1 + Monthly Rate)Months. Monthly Payment = [(Loan Amount − Present Value of Balloon) × Monthly Rate] ÷ [1 − 1 ÷ (1 + Monthly Rate)Months]. Total Interest = (Monthly Payment × Months + Balloon Amount) − Loan Amount.
Example: A CA$100,000 business loan at a 9% interest rate (example rate — enter your actual rate) over a 7-year term, with no balloon payment, would have a monthly payment of about CA$1,608.91 and total interest of roughly CA$35,148 over the life of the loan. (Note: this example is for illustration purposes only.)
Small business financing in Canada is available from traditional banks, credit unions, online/alternative lenders, and through government-supported programs. The Canada Small Business Financing Program (CSBFP) helps small businesses access loans for things like equipment, leasehold improvements, and real estate by sharing risk with lenders, which can make financing more accessible even for newer businesses. The Business Development Bank of Canada (BDC) is a federal Crown corporation that provides financing, advisory services, and investment specifically for Canadian businesses, often with terms tailored to growth-stage or specific industry needs. Common business loan types include term loans (a lump sum repaid over a fixed schedule, as modelled here), lines of credit (revolving credit for working capital), and equipment financing (often secured by the equipment itself, sometimes structured with a balloon payment reflecting the equipment's expected residual value). Many small business loans, especially for newer businesses, require a personal guarantee from the owner(s), meaning you could be personally liable for the debt even though it's a "business" loan - this is an important consideration when evaluating loan terms and the loan amount relative to your business's cash flow.
A balloon payment is a large lump sum due at the end of the loan term, after smaller regular payments throughout. It lowers the monthly payment compared to a fully-amortizing loan, which can help cash flow, but requires you to pay off or refinance the balloon amount when due. Equipment financing sometimes uses balloon structures reflecting the equipment's expected resale or residual value at the end of the term.
The CSBFP is a federal government program that helps small businesses access loans by sharing risk with participating lenders (banks and credit unions), making it easier for businesses - including newer ones - to obtain financing for purposes like purchasing equipment, leasehold improvements, or real estate. It's administered through lenders, not directly by the government, so you'd apply through a participating financial institution.
A personal guarantee is a commitment by the business owner(s) to personally repay the loan if the business cannot - effectively making the owner liable beyond the business's own assets. This is common for small business loans, especially for newer or smaller businesses, and is an important factor to understand before signing, since it can put personal assets at risk if the business defaults.
A term loan provides a lump sum upfront, repaid on a fixed schedule with regular payments - this is what this calculator models. A line of credit provides revolving access to funds up to a limit, where you only pay interest on the amount drawn and can repay and re-borrow as needed - more suited to managing fluctuating working capital needs than financing a specific large purchase.
The Business Development Bank of Canada (BDC) is a federal Crown corporation focused specifically on financing and supporting Canadian businesses, often providing more flexible terms, higher-risk-tolerance financing, or advisory services that a traditional bank might not offer - particularly for growth-stage, innovative, or underserved businesses. It typically complements rather than competes directly with traditional bank financing.
It depends on your business's overall financial picture - extra payments reduce total interest and shorten the loan term, but tying up cash in debt repayment means it's not available for other opportunities, emergencies, or working capital needs. Compare the loan's interest rate to the potential return on other uses of that cash, and ensure you maintain adequate liquidity before prioritizing extra debt repayment.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute financial or business advice. The interest rate used is an example only and does not represent a rate currently offered by any specific lender - actual rates depend on the lender, your business's creditworthiness, loan purpose, and collateral, and change frequently. Always compare offers from multiple lenders and consult a qualified financial adviser or accountant for advice specific to your business.