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How do business loan payments work?

Last updated May 2026 · Reviewed by David Chen
Quick Answer

Business loan payments vary by product. Term loans use fixed monthly payments with principal + interest. MCAs use daily/weekly ACH or a percentage of credit card sales. Lines of credit only require interest on what you draw. Equipment financing follows fixed monthly amortization for up to 60 months.

Key Details

  • Term loan: fixed monthly P&I payment
  • MCA: daily ACH or % of card sales (5-20% holdback)
  • Line of credit: interest-only on drawn amount
  • Equipment financing: fixed monthly, up to 60 months
  • Invoice factoring: factor takes fee from collected invoice
  • Revenue based: fixed daily/weekly ACH

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Answer by David Chen — Senior Business Funding Editor
12+ years in alternative lending. $200M+ underwritten.

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