Enter your loan details and expected revenue to find out if borrowing makes financial sense — before you sign anything.
Most business owners focus on whether they can afford the monthly payment. That’s the wrong question. The right question is whether the loan generates more value than it costs. This calculator shows you the total cost of borrowing, your net profit after payments, and the ROI — so you can make a data-driven decision, not a gut-feeling one.
Loan Details
Enter your loan details and click Calculate ROI
Your ROI breakdown will appear here
How to Use It
Step 1 — Enter the loan amount
This is the principal you're borrowing, not including interest. Enter the amount you're considering taking out.
Step 2 — Enter the annual interest rate
Use the APR from your lender. If you're comparing offers, run the calculator multiple times with each rate to see the real cost difference.
Step 3 — Enter the loan term in months
A 3-year loan is 36 months. A 5-year loan is 60 months. Shorter terms mean higher monthly payments but less total interest paid.
Step 4 — Enter the revenue you expect this loan to generate
Be conservative. If the loan funds a marketing campaign, equipment purchase, or expansion — estimate the additional revenue it will realistically produce over the loan period.
Step 5 — Read your ROI
A positive ROI means the loan is worth it. A negative ROI means the cost of borrowing exceeds what you're generating. That's the number that matters.
How the Math Works
We use the standard amortization formula to calculate your monthly payment: M = P[r(1+r)^n] / [(1+r)^n − 1] where P is the principal, r is the monthly interest rate, and n is the number of months.
From there: Total Cost = Monthly Payment × Loan Term (months).
Then: Net Profit = Expected Revenue − Total Cost.
And finally: ROI = (Net Profit / Total Cost) × 100.
A positive ROI means the loan pays for itself and then some. A negative number means you're paying more than you're making back.
Who This Is For
Small business owners evaluating an SBA loan or bank loan
Entrepreneurs considering equipment financing or a line of credit
Business owners comparing multiple loan offers side by side
Anyone who wants a data-backed answer before taking on business debt
Tips for Evaluating a Business Loan
Use conservative revenue estimates
Use your realistic-case number, not your best case. Run the worst case too. If the ROI is still positive at 70% of your expected revenue, you're in a safer position.
Compare total cost, not monthly payment
Lenders lead with the monthly payment because it sounds manageable. A 60-month loan at 12% interest can cost nearly 40% more than the principal. Total cost is what matters.
Factor in opportunity cost
If your loan ROI is lower than your alternative investment return, the loan may not be the right move even if the ROI is technically positive.
Watch for fees beyond the interest rate
Origination fees, prepayment penalties, and closing costs add to the true cost. Always get the APR — not just the interest rate — and ask about all fees before signing.
Think beyond the loan term
Equipment that generates revenue for 10 years after the loan is paid off has a much higher true ROI than this calculator shows. Factor in the full asset lifespan.