Business Debt Payoff Calculator
Business debt doesn't have to keep you up at night. This calculator shows you the fastest payoff strategy — avalanche vs. snowball — with a month-by-month schedule.
Business Loan Affordability Calculator
Can your business handle the loan payments?
Debt service ratio: 27.0% (35% threshold)
Uses standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n - 1]. The 35% rule suggests keeping debt payments below 35% of net income for healthy cash flow. First year payments are weighted toward interest.
Frequently Asked Questions
Should I use the avalanche or snowball method to pay off business debt?+
Avalanche (highest interest first) saves the most money mathematically. Snowball (smallest balance first) gives psychological wins faster. If you have high-interest debt (credit cards, MCAs), use avalanche. If you need motivation, use snowball. Both work — pick the one you'll stick with.
How do I decide which business debts to pay off first?+
Priority: (1) Merchant cash advances and factoring (effective rates often 50-200%). (2) Credit cards (15-25%). (3) Equipment loans (6-15%). (4) SBA loans (6-8%). (5) Friends/family. Always pay minimums on everything else while targeting the highest-rate debt.
Should I use business revenue to pay off debt or reinvest?+
Pay off high-interest debt (above 10%) first — the guaranteed return of eliminating that rate beats most investments. For low-interest debt (SBA loans, mortgages), reinvesting in growth often has a higher ROI. Balance: maintain cash reserves while making extra debt payments.
Should I use the avalanche or snowball method to pay off business debt?
Avalanche (highest interest first) saves the most money mathematically. Snowball (smallest balance first) gives psychological wins faster. If you have high-interest debt (credit cards, MCAs), use avalanche. If you need motivation, use snowball. Both work — pick the one you'll stick with.