Franchise Loan Payment Calculator

How the monthly payment is calculated

The tool reads four inputs and applies the standard fixed-rate amortization formula.

• Principal = total amount to finance times (1 minus the down payment percentage). Amount is clamped to $50,000 to $5,000,000, down payment to 0 to 50 percent.
• Monthly rate = APR divided by 12 (APR clamped to 0 to 30 percent). Number of payments = term in years times 12 (term clamped to 1 to 25 years).
• Payment = principal times monthly rate, divided by (1 minus (1 + monthly rate) to the power of minus the number of payments). At a zero rate it is the principal divided by the number of payments.
• Total repaid = payment times number of payments. Total interest = total repaid minus principal. The balance lines use the standard remaining-balance formula and appear only when the term is longer than one year (year 1 balance) or five years (year 5 balance).

What it leaves out: your down payment (it is not part of the payments or the totals), the SBA guaranty fee and any other lender or closing fees, an interest-only or delayed-start period, any rate reset on a variable-rate loan, prepayment terms, and taxes. Every number is a level payment on one fixed rate for the whole term, so it is a baseline to test against, not a quote.

A worked example (invented numbers)

Take a $450,000 project with 10 percent down, a 10.0 percent rate, and a 10-year term. These inputs are illustrative only.

• Down payment: $450,000 times 10 percent = $45,000. Principal: $405,000.
• Monthly rate: 10.0 divided by 12 = 0.8333 percent. Payments: 120.
• Payment: about $5,352.10 a month ($64,225 a year).
• Total repaid: $5,352.10 times 120 = about $642,253. Total interest: about $237,253.
• Balance after year 1: about $380,157. After year 5: about $251,899.

Now test the levers. Shortening the term to 7 years lifts the payment to about $6,723 a month and cuts total interest to about $159,772, so the term is where monthly cash flow and total cost trade against each other. Moving the rate one point either way changes the payment by roughly $220 to $230 a month on this loan (about $5,130 at 9 percent, $5,579 at 11 percent).

What the SBA rules cap: rate and term

The SBA sets the maximum variable rate on a 7(a) loan by loan size. The rulebook,SOP 50 10(version 8 effective June 1, 2025; version 8.1 effective October 1, 2026), says a standard 7(a) loan “cannot exceed Prime or SBA Optional Peg Rate” plus 6.5 percent for loans of $50,000 or less, 6.0 percent from $50,001 to $250,000, 4.5 percent from $250,001 to $350,000, and 3.0 percent above $350,000. SBA publishes the maximum fixed rates separately; ask your lender for the current table. The Federal Reserve’s H.15 releaseof September 29, 2026 shows a bank prime loan rate of 7.00 percent on September 28, 2026. On that Prime, the variable ceilings work out to 13.50, 13.00, 11.50, and 10.00 percent by size band. Prime moves, so recompute before you rely on it.

This matters for the defaults. The default loan here is $360,000 after 10 percent down, above the $350,000 line, so a variable-rate loan at Prime 7.00 percent could not exceed 10.00 percent. The 10 percent default sits at that ceiling, so treat it as the worst case for a variable-rate loan of that size, and lower it to the rate your lender actually quotes.

Terms are capped too. Under the same rulebook’s maturity appendix, working capital and intangible assets (including goodwill) may not exceed 10 years, equipment generally should not exceed 10 years (up to 15 where the IRS asset class useful life supports it), leasehold improvements may not exceed 10 years plus a completion period of no more than 12 months, and real estate loans may not exceed 25 years. The SBA’s 7(a) terms pagegives the same 10-year and 25-year limits and a $5 million maximum loan. For a cafe that leases its space and finances buildout, a franchise fee, and working capital, these rules point to 10 years or less. The 25-year setting fits only when real estate is part of the financing.

Fees the payment does not show

The SBA charges the lender an upfront guaranty fee, and the rulebook lets the lender pass it to the borrower and lets loan proceeds pay it. For 7(a) loans approved from October 1, 2026 through September 30, 2027, the SBA’s FY 2027 fee notice(control number 5000-881797, published September 3, 2026) sets the fee on loans of $150,001 to $700,000 at 3 percent of the guaranteed portion. It also sets a 0 percent fee on loans of $700,000 or less to manufacturers, to businesses in a listed set of food-supply-chain NAICS codes, and to businesses located in a rural area. On the worked example, the guaranteed portion is 75 percent of $405,000 (the SBA states 75 percent for loans above $150,000), or $303,750, so the fee would be about $9,113. If the fee is financed, the payment would rise to roughly $5,473 a month. Ask whether your location counts as rural, because that changes the fee to zero.

Turn the payment into the cash flow the store must earn

A payment is only affordable if the unit earns enough to cover it. SOP 50 10 defines debt service coverage as operating cash flow (EBITDA) divided by debt service. For a standard 7(a) loan above $350,000 the ratio “must be equal to or greater than 1.15” on a historical and/or projected basis, and 1:1 globally. On the worked example, $64,225 a year of payments times 1.15 means about $73,859 of EBITDA a year, before your own pay. Build that comparison in theprojections template, and read the payment next to royalties, the ad fund, rent, and payroll, which come out of the same monthly cash flow. To size the loan from your cash instead, use the affordability calculator and our guide to SBA loans for a franchise.