There is no shortage of lenders or loan options to select for a business, and that variety can cause a lot of confusion. Add in a complex terminology that reads like another language, and it can be flat out frustrating to choose a loan for your business.

Every loan is different. Whether it be fees or differences in interest rate, each loan offers something that is unique from the others. On the surface, it can seem like the inventory loan with the lowest interest rate is the best choice. Unfortunately, with all of the attached fees, it is not always that simple.

That leaves only one option; to calculate your APR. This is done by totaling up how much each loan will cost you in the long run and comparing those prices, rather than the flat rates that are hurled at you.

What is it?

Of course, the most common question is “What is APR?” Simply put, APR (Annual Percentage Rate) on a loan or line of credit is the total amount of money that you will pay to that loan. It covers everything, be it the interest, extra fees, every penny that will ever go toward that loan. This makes it much simpler than comparing interest rates, which do not cover the entire cost of the loan. Because the APR encompasses everything that will go toward the loan, it is much more reliable to compare the APR of loans, and can end up saving you from choosing the wrong option.

How does it work?

A lot of people think that this doesn’t matter, that if you just pick the lowest interest rate then you will end up paying the least amount of money. Wrong. While small fees like origination fees may not seem like much, they can really add on to the total amount of a loan. For example, say you’ve found two loans that each offer a 7% interest rate. One loan, however, has fees that add an extra 5% onto the loan, while the other adds only 2%. The choice here is simple, but you would have never known the difference without calculating the APR.

How do I Calculate It?

As you might imagine, a lot can go into calculating an APR. There are things like the length of time until the loan is paid off, how often you’ll make payments, additional fees, and a whole laundry list of things that you don’t want to be bothered with. Make it easy on yourself, just put the numbers into any of the online business loan calculators on the web. Just select the loan product that you want to calculate, and punch in the numbers. You have the APR, and you didn’t even need to give yourself a headache!

What Should I Know Before I Get a


When lenders are considering the APR of a loan, it is often a very personal process. They will look at your credit history, the credit history of your business, how much you’ve made, your current debts, all of the metaphorical skeletons in the closet. If you have a history of defaulting or making late payments on loans, you will find that you’re paying much higher APR rates than normal. Watch out for this, and if the lender doesn’t give you the APR rate, calculate it yourself. It is important to know how much you’re agreeing to pay!

It is often a struggle, but there is always a way to work these things out. Just pay attention to the loans being offered you, be aware of the difference between APR and interest rate, and you’ll find a loan for your business. It is best to use reliable lenders like Certified Business Loans that have a lot of experience with these things and will help lead you through the process, especially for small businesses. As long as you have been in business for a year, they will work with you to get a loan that you are happy with. Certified Business Loans is a lender that cares about the success of your business, and why would you borrow money from someone that doesn’t want you to succeed?