Rate is only one input
Total interest depends on rate, term and how the loan amortizes. Fees, guarantee costs and prepayment terms add to the real cost.
Total interest as a % of the loan
A simple comparison: total interest ÷ loan amount. $200,000 at 10% over 5 years costs about 27% of the loan in interest; over 10 years about 59%.
Interest coverage ratio
Interest coverage = EBIT ÷ annual interest. It shows how comfortably operating profit covers interest. A low ratio means a small dip in profit could make interest hard to pay.
Variable rates
Many business loans float with an index like Prime. Stress-test your payment at a rate 2–3 points higher before committing.
Estimates only. Results vary. No guarantee of approval, rates or savings.
Examples use hypothetical numbers. Educational content, not financial, legal or tax advice. Profit Theory is not a lender; lenders set their own requirements and make all credit decisions.