Free calculator
Loan Payment Calculator
Model a standard amortizing loan and check the debt service coverage ratio lenders will look for.
Your inputs
Typical SBA 7(a) minimum is 10%
Years
Optional — leave at 0 to skip the debt service coverage check
Your results
Monthly Payment
$4,098
Total Interest
$194,268
Principal Financed
$297,500
Total of Payments
$491,768
Debt Service Coverage Ratio
Add monthly income to check
Remaining balance over time
| Milestone | Remaining balance |
|---|---|
| Year 1 | $280,193 |
| Year 3 | $239,339 |
| Year 5 | $188,482 |
| Year 10 | $0 |
Year 1
- Remaining balance
- $280,193
Year 3
- Remaining balance
- $239,339
Year 5
- Remaining balance
- $188,482
Year 10
- Remaining balance
- $0
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A copy of your inputs and numbers, so you can compare scenarios later.
How this is calculated
This calculator estimates a standard fully-amortizing loan payment and, if you provide your expected monthly net operating income, checks it against the debt service coverage ratio most SBA lenders require. It's a planning estimate, not a lending decision — actual terms depend on your specific lender's underwriting.
- Principal = loan amount minus your down payment.
- Monthly payment = standard amortization: principal × monthly rate ÷ (1 − (1 + monthly rate)^−months), where monthly rate is your annual rate divided by 12.
- Total interest = total of all payments over the term minus the principal.
- Debt service coverage ratio (DSCR) = monthly net operating income ÷ monthly payment. Most SBA 7(a) lenders look for at least 1.25x — below that, a deal is harder to underwrite even if the math otherwise pencils.
- This models a standard fully-amortizing loan. It doesn't account for SBA guaranty fees, closing costs, or a variable-rate loan's rate resets — build those into your total investment separately.
Worked example
A $350,000 loan at 15% down (financing $297,500) at 11% over 10 years runs about $4,098/month — check your own numbers above.
All outputs are planning estimates, not guarantees. Consult the brand FDD and your advisors for decisions.
Most franchise purchases are financed, and the loan terms shape your cash flow for years. Beyond the monthly payment, lenders care about your debt service coverage ratio (DSCR) — whether the location generates enough cash to comfortably cover the debt.
This calculator estimates amortized payments, total interest, and DSCR for an SBA-style loan so you can compare lender offers and confirm the deal still cash-flows after debt service.
The formula
Monthly payment = P × r ÷ (1 − (1 + r)^−n), where r is the monthly rate and n the number of payments. DSCR = net operating income ÷ annual debt service.
Related guide: How to finance a franchise
Frequently asked questions
- What DSCR do lenders want for a franchise loan?
- Lenders typically look for a debt service coverage ratio of at least 1.25x — meaning the business generates 25% more cash than needed to cover its debt payments. Some SBA lenders want more headroom.
- How are SBA loan payments calculated?
- SBA 7(a) loans are usually fully amortizing with a fixed or variable rate over a set term. The monthly payment is a standard amortization of principal and interest over the number of payments.
- Should I finance the maximum I qualify for?
- Not necessarily. Borrow to a payment your ramp-year cash flow can cover, keeping DSCR comfortably above the lender minimum so a slow start doesn't threaten the loan.