A loan can grow a business or sink it. The difference is usually whether the owner did the math first.
Know the payment and the total
The payment depends on the amount, the interest rate and the term. A longer term lowers the payment but raises the total interest paid.
Check the coverage
Lenders often look at how many times the business's monthly cash flow covers the loan payment. A comfortable cushion protects you in slow months.
Read the fine print
- Origination and closing fees.
- Prepayment penalties.
- Personal guarantees and collateral.
- Whether the rate is fixed or can change.
Our loan payment calculator shows the payment, total interest and coverage.
General information, not financial advice.
This article is general information, not legal, tax or regulatory advice. Rules change; confirm current requirements with the responsible agency or a licensed professional.
