Can you Amortize Your Bank Loan?

As a small business owner, your bank financing is some of the most important financing you have. It's also some of the most difficult to get right now. You want to be a savvy customer when you walk into a bank to obtain your bank financing. One thing you can do to be the smartest consumer on the block is understand how the bank calculates your interest rate on your business loan.

Usually, a bank loan made to a small business will be an installment loan. Small loans carry among the highest interest rates of all loans. They carry with them an amortization schedule which states the payment you make every time period, divided up by the principal and interest, along with the ending balance for that time period, whether it be a month or a year.

At the very least, you have to understand loan amortization. You should also understand how to put together your own amortization schedule so you can see how much money you will save by paying off your loan early. Here's an example to help you out!