How the down payment sets the size of the loan
The loan is the purchase price less your down payment. Loan to value (LTV) is the loan divided by the price, so a 20% down payment means an LTV of 80%. This calculator then runs the same business term loan arithmetic as the business loan calculator on that smaller loan, so the two pages agree to the penny when the loan amount is the same.
You can enter the down payment as a percentage of the price or as a fixed dollar amount. Choose which one the calculator uses in the first selector, and it ignores the other field. It also shows the cash you need at closing, which is the down payment plus any fees you pay in cash rather than finance.
Worked example: a $125,000 purchase with a 20% down payment
Buy equipment for $125,000 with a 20% down payment. The down payment is $25,000.00, so you borrow $100,000.00 and the loan to value is 80.00%. Take a 9.5% interest rate over seven years, paid monthly, with a 2% origination fee deducted from the loan. You receive $98,000.00 and pay $1,634.40 a month for 84 months.
Total interest is $37,289.45. With the $2,000.00 origination fee, the total cost of borrowing is $39,289.45, which is 39.29% of the loan. The APR, which includes the fee and is quoted here as the nominal annualized rate, is 10.15%, above the 9.5% interest rate. The purchase price plus the cost of borrowing comes to $164,289.45.
What a bigger down payment saves
The comparison table in the results shows the same loan at five fixed down payments, using your rate, term and fees. On the example above, financing the whole $125,000 with no down payment costs $2,043.00 a month and $49,111.81 in total interest and fees. A 40% down payment leaves a loan of $75,000.00, a payment of $1,225.80 and a total cost of $29,467.08.
The down payment is not a cost of borrowing, but it is cash the business no longer has. A 40% down payment is $50,000.00 of your own money, against $25,000.00 at 20%. Weigh the lower payment against what that cash could do elsewhere, such as working capital.
A percentage or a fixed amount
If the seller or lender quotes the down payment in dollars, choose a fixed amount. On a $300,000 purchase with a $60,000 down payment at 8.25% over ten years, the loan is $240,000.00 and the LTV is 80.00%. The payment is $2,943.66 a month, the total cost of borrowing is $118,039.56 and the APR is 8.72%. The down payment must be less than the price, and the loan must be at least $1.
Origination fees and the cash you need at closing
An origination fee can be deducted from the loan, added to it or paid separately. On a $180,000 purchase with a 10% down payment, a 2.5% origination fee added to the loan and $1,200 of closing costs, the down payment is $18,000.00 and the loan to be repaid starts at $166,050.00. The closing costs are paid in cash, so you need $19,200.00 at closing.
At a 9.5% interest rate over seven years with payments every two weeks, each payment is $1,250.71. The APR with every cost is 10.54%.
Interest-only start, extra payments and paying off early
Some lenders allow interest-only payments at the start. On a $500,000 purchase with a 25% down payment over 15 years at 7.75% and 12 interest-only months, you pay $2,421.88 a month at first and then $3,664.41, because the balance has not fallen in the meantime.
To see the effect of extra payments, enter an amount and a payoff date. On a $220,000 purchase with a 20% down payment over 12 years and a $25 monthly account fee, paying $250 extra each month clears the loan in 118 months and saves $24,303.15 of interest. Paying off after 36 months with a 2% prepayment charge means paying $138,287.57 plus a $2,765.75 charge, for a total cost of $52,374.73 to that point.
What this estimate leaves out
Lenders set their own down payment, loan to value and collateral requirements, and may base the loan on an appraisal rather than the price you pay. This calculator does not check eligibility, model a variable rate, or include sales tax, title fees, insurance or the lender's charges beyond the fees you enter. The terms in your loan agreement are the ones that count.
To start from the loan amount instead of a purchase price, use the business loan calculator .
For equipment financed through a dealer or lender, see the equipment loan calculator .
Use the right country page
This page stays in dollars and uses US terms: down payment, origination fee, prepayment charge and APR as the nominal annualized rate. The country choices above the inputs open separate local pages. Choosing United Kingdom opens the business loan calculator with a deposit, which uses a deposit, an arrangement fee and an effective annual APR. The inputs reset and amounts are not converted.
Inputs for the business loan down payment calculator
Purchase price
What the asset or property costs, before any down payment.
Down payment is
Choose whether the down payment comes from the percentage field or the fixed amount field.
Down payment percentage
Used when you choose a percentage. 20 means a fifth of the price.
Down payment amount
Used when you choose a fixed amount. It must be less than the price.
Interest rate
The yearly interest rate on the loan, before fees. Fees are included in the APR shown in the results.
Term in
Enter the loan term in years or in months.
Term
How long you will take to repay the loan. Up to 30 years, or up to 360 months.
Repayments
Monthly, every two weeks or weekly. More frequent payments reduce the balance faster.
Interest-only period at the start
Months at the start when you pay only interest. Enter zero for none.
Origination fee
A percentage of the loan amount, from your quote. Enter zero if none.
Origination fee is
Deducted means you receive less. Added means you pay interest on it. Separate means you pay it in cash.
Fee with each repayment
A fixed account or servicing fee charged with every payment. Enter zero if none.
Closing and other fees
Fixed costs paid in cash at the start. Do not repeat the origination fee here.
Extra paid with each repayment
An extra amount added to every payment after any interest-only period. Enter zero for none.
Settle the loan after
Pay off the whole balance after this many months to see the cost. Zero runs to the end of the term.
Prepayment charge
A percentage of the balance you pay off early. Enter zero if none.
CALCULATOR QUESTIONS
US business loan down payment calculator questions
How do I calculate a business loan with a down payment?
Subtract the down payment from the purchase price to get the loan, then work out the payment on that loan. A $125,000 purchase with a 20% down payment is a $100,000 loan, and at 9.5% over seven years the payment is $1,634.40 a month.
How much down payment do I need for a business loan?
It depends on the lender and the asset, so ask for the lender's minimum in writing. Use the comparison table to see how the payment and total cost change at 0%, 10%, 20%, 30% and 40%.
What is loan to value on a business loan?
The loan divided by the purchase price or appraised value, as a percentage. A $100,000 loan on a $125,000 purchase is an LTV of 80.00%.
Is the down payment part of the cost of the loan?
No. The down payment reduces the loan, so it lowers the interest, but it is your own cash rather than a cost of borrowing. The calculator shows the price plus the cost of borrowing so you can see both.
Can I enter the down payment as a fixed dollar amount?
Yes. Choose a fixed amount in the first selector and enter it in dollars. The down payment must be less than the price.
Does the APR include the origination fee?
Yes. The APR includes the origination fee and any other fees you enter, so it is higher than the interest rate. On the example loan the APR is 10.15% against a 9.5% rate.
What happens when I change country?
The United Kingdom option opens the separate business loan calculator with a deposit, in pounds, with an arrangement fee and an effective annual APR. Your inputs are reset rather than converted.