Free Business Tool
Business Loan Calculator
Calculate your monthly payment, total interest, and total cost for any business loan — equipment, vehicle, working capital, or expansion financing for your home services company.
See How SubcontractorHub Helps Contractors GrowWhat Will This Loan Actually Cost You?
Enter the loan amount, APR, and term. Monthly payment and total interest update instantly.
Typical for Equipment purchase: 7–12%
Monthly payment
$1,025.83
60 payments of $1,025.83
Total paid
$61,550
principal + all interest
Total interest
$11,550
23.1% of principal
Principal
$50,000
borrowed amount
APR
8.5%
7–12% typical for this type
Estimates only. Actual payments may differ based on your specific lender terms, origination fees, prepayment provisions, and whether interest is calculated on a simple or compound basis. Always review the full loan agreement before signing.
How to Use This Calculator
Enter the loan amount
Use the amount you plan to borrow, not the total cost of the asset. If you're buying a $45,000 work truck with $5,000 down, enter $40,000. For working capital, enter the credit line amount or the expected draw amount for this use.
Enter your APR
APR is the all-in annual rate including fees. Check your lender's offer letter — it should state APR prominently. If comparing lenders, always compare APR, not the quoted interest rate. A lower stated rate with high origination fees may have a higher APR than a higher-rate loan with no fees.
Select the loan term
Shorter terms mean higher monthly payments but less total interest. Longer terms reduce monthly payments but significantly increase total cost. A $50,000 loan at 8.5% APR costs $11,600 in interest over 60 months but $19,400 over 84 months — $7,800 more for $200 less per month. Only extend term if you need to for cash flow, not as a default choice.
Compare across scenarios
Run the calculator at 48, 60, and 72 months to see the monthly payment vs. total interest tradeoff. The right term depends on your cash flow needs — can you comfortably service a 48-month payment, or do you need 60 months to keep debt service manageable relative to revenue?
Common Financing Needs for Home Services Contractors
Work trucks and vans
A single-axle work truck runs $35,000–$60,000 new. At 8% APR over 60 months, a $45,000 truck costs $912/month. Budget for insurance, maintenance, and fuel on top of the loan payment. Vehicle loans through manufacturers or credit unions often have the lowest rates.
Installation equipment
HVAC vacuum pumps, manifold gauges, and recovery machines: $2,000–$8,000. Roofing nail guns and compressors: $1,000–$5,000 per crew. Solar racking and electrical tools: $5,000–$15,000. Equipment loans typically run 7–12% over 36–60 months.
Working capital for insurance jobs
Roofing contractors doing insurance claim work often wait 30–90 days for payment while paying crews and material suppliers within 7–14 days. A working capital line of credit bridges this gap. Rates are higher (8–18%) but the cost is often justified by the cash flow certainty.
CRM and proposal software
Technology investments (CRM, proposal software, project management) typically run $500–$2,000/month for a 10-person contractor. Most are subscription-based and don't require financing, but some contractors use working capital lines to fund the ramp-up period before ROI materializes.
Hiring and training ramp-up
Adding a field crew costs $80,000–$150,000 in annual loaded labor before that crew is fully productive and generating revenue. A working capital loan or SBA 7(a) can fund this ramp-up period, with the expectation that the new crew's revenue services the debt within 3–6 months.
Marketing and lead generation ramp-up
Scaling Google Ads or a D2D program requires front-loading spend before the revenue follows. A $2,000/month Google Ads budget generating jobs at a 60-day attribution window means you're out $4,000 before the first check arrives. Understanding the true payback window before drawing down credit is critical.
Help Your Customers Finance Their Jobs the Same Way You Finance Your Business
Homeowners buying a $12,000 HVAC system or a $9,000 roof face the same question you did when buying your truck: can I afford the monthly payment? SubcontractorHub embeds GoodLeap, Service Finance, and LightReach financing directly in your proposals so customers see the monthly payment alongside the total price — and close the same day.
See How It WorksGoodLeap, Service Finance & LightReach embedded in proposals
Customers see monthly payment alongside total price
Financing approval in minutes — no manual paperwork
Contractor receives full payment at job completion
Works for HVAC, roofing, and solar installation jobs
Common Questions About Business Loans
How do I calculate a business loan payment?
Monthly payment = Principal × [r(1+r)^n] ÷ [(1+r)^n − 1], where r = monthly interest rate (APR ÷ 12 ÷ 100) and n = number of months. For a $50,000 loan at 8.5% APR over 60 months: r = 0.085/12 = 0.00708, n = 60. Payment = $50,000 × [0.00708 × (1.00708)^60] ÷ [(1.00708)^60 − 1] = approximately $1,027/month. Total paid = $61,620. Total interest = $11,620.
What is a typical interest rate for a small business loan?
SBA 7(a) loans for established businesses typically run 6.5–9.5% APR in 2025–2026. Equipment financing often runs 7–12% depending on equipment type and business credit. Working capital loans run 8–18%. Online lenders (Kabbage, OnDeck, BlueVine) charge significantly more: 15–50%+ APR. Vehicle loans through manufacturers or credit unions often run 6–9%. Your personal credit score and time in business are the biggest rate drivers.
What can contractors use business loans for?
Common uses for contractor business loans: (1) Vehicles and equipment — trucks, trailers, HVAC installation equipment, solar racking tools, roofing machines. (2) Working capital — bridging the gap between job completion and payment collection, especially for insurance-claim roofing contractors with 30–90 day payment cycles. (3) Payroll and growth — hiring and training field crews before revenue catches up. (4) Material inventory — buying materials at volume discount. (5) Marketing and technology — CRM, proposal software, and lead generation ramp-up.
Should I use an SBA loan or equipment financing to buy a work truck?
Equipment financing or USDA/SBA equipment loans are generally better for work trucks than general SBA 7(a) working capital loans because: (1) The truck is the collateral, reducing the need for additional security. (2) Equipment loan terms often match the truck's useful life (48–72 months). (3) Rates are often slightly lower because the lender can repo the asset. SBA 7(a) loans make more sense for general business investments without specific hard-asset collateral.
How much can a contractor afford to borrow?
A useful rule of thumb: your total monthly debt service (all business loan payments) should not exceed 10–15% of your monthly gross revenue. A roofing contractor doing $80,000/month in revenue can afford roughly $8,000–$12,000/month in total debt payments. Lenders typically look for a Debt Service Coverage Ratio (DSCR) of 1.25 or higher: your net operating income should cover loan payments 1.25× over.
What is the difference between APR and interest rate on a business loan?
Interest rate is the annualized cost of the principal balance. APR (Annual Percentage Rate) includes interest plus all fees (origination fees, closing costs, prepayment penalties) spread across the loan term. APR is always equal to or higher than the stated interest rate. For comparison purposes, always use APR. A loan advertised at '6% interest rate' with a 2% origination fee has an effective APR of roughly 6.5–7% depending on term length.
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Book a Free DemoAll calculations are estimates based on historical information and should be verified by the user.