Startup Loan Calculator

Most founders end up choosing among three routes, and the same $50,000 costs a different amount on each one. A microloan at 9 percent over six years runs $901 a month and about $14,900 in interest. An online lender at 24 percent over three years charges $1,962 a month and about $20,600 in interest, and a 5 percent origination fee takes $2,500 off the top before you see the money. Your own savings cost no interest at all, but they leave you without a cushion if the launch runs long. The monthly payment difference matters more than the totals suggest. A business that will not break even for a year has to cover that $1,962 out of pocket every month in the meantime, which is over $23,000 of runway consumed by debt service alone before revenue arrives.

The SBA does not make microloans itself. It lends to nonprofit intermediaries, and those organizations relend the money locally in amounts up to $50,000, with the average loan running far below the cap, historically around $13,000. Intermediaries set their own rates, usually 8 to 13 percent, and their own credit standards, which tend to be forgiving because the program exists to reach borrowers banks pass over, startups included. Many require or offer business training alongside the loan. Founders sometimes resent the classroom hours, but the training correlates with survival, and an intermediary that teaches you cash flow management before handing you money is doing you a favor. Program details and a path to local intermediaries are at sba.gov/funding-programs/loans. Plan on two to eight weeks from application to funding, which is the price of the cheapest startup debt most new businesses can get.

Online business lenders sell speed. Underwriting runs on your bank account data and a soft credit pull, decisions come back in hours, and money can land in one to three days. The price of that convenience shows up in three places. The headline rate is higher, commonly 10 to 30 percent for a young business. An origination fee of 1 to 5 percent comes out of the proceeds, so a $50,000 approval might deposit $47,500. And some lenders quote a factor rate instead of an interest rate: borrow $50,000 at a 1.2 factor and you repay $60,000, which sounds like 20 percent but works out near 35 percent APR over a year because you pay on the full principal the entire time, with no benefit from the declining balance. There are moments when the math still works. A supplier offers inventory at 30 percent off for cash this week, or a contract requires equipment you can put to work immediately at a known margin. The test is a short-lived opportunity with a margin you can point to. General runway for a pre-revenue startup fails that test.

Roughly half of new businesses are gone within five years, a pattern that has held for decades in the BLS Business Employment Dynamics data. That base rate should shape how you fund the launch. A failed business still owes its loans, and if you signed a personal guarantee the debt follows you home. Savings you spent are simply gone, with nothing trailing after. Funding the early, most uncertain stage from savings and early customer revenue, then borrowing once the concept has proof behind it, puts the cheapest capital against the riskiest period. Whatever the mix, size the number honestly before you raise it. Add up one-time costs: registration, licenses, initial equipment and inventory, a website, launch marketing, deposits, and legal or accounting fees. Then add six months of operating expenses, including your own pay, and a 25 percent buffer on the whole thing. The buffer is not pessimism; break-even arrives later than founders expect, often 6 to 12 months for retail, 3 to 6 for service businesses, and 12 to 18 for restaurants. If the total is bigger than you hoped, shrinking the launch or pairing a microloan with savings usually beats one oversized loan at a painful rate.