Can I deduct business loan interest?

Last updated May 2026 · Reviewed by David Chen
Quick Answer

Yes, business loan interest is generally tax deductible as a business expense. The 2017 Tax Cuts and Jobs Act limits interest deduction to 30% of adjusted taxable income for businesses with $25M+ revenue. MCA payments are not technically interest but the financing fee may be deductible — consult your CPA.

Key Details

  • Interest is deductible as business expense
  • Cap: 30% of adjusted taxable income (large businesses)
  • Most small businesses fully deductible
  • Principal is NOT deductible
  • MCA: factor amount deductibility varies
  • Always consult your CPA
Answer by David Chen — Senior Business Funding Editor
12+ years in alternative lending. $200M+ underwritten.

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