Financial Toolset

SBA Loan Calculator

Calculate SBA 7(a) and 504 loan payments with guarantee fees.

Compare SBA loan programs and estimate total costs.

Free SBA loan calculator.

Calculator

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Results

Monthly Payment
$0.00
Total of All Payments
$0.00
Total Interest Paid
$0.00
Origination Fee Amount
$0.00
Total Cost (Payments + Fees)
$0.00
Effective APR (Including Fees)
0.00%

Loan Cost Breakdown

Principal (Borrowed)$250000.00
Total Interest$0.00
Origination Fee$0.00

Business Loan Types

SBA 7(a): General-purpose small business loans, up to $5M, 10-25 year terms, competitive rates (currently 9-12%).

SBA 504: Real estate and equipment financing, up to $5.5M, 20-25 year terms.

Term Loans: Traditional bank loans, fixed or variable rates, 1-10 year terms, typically 7-15% rates.

Equipment Financing: Secured by equipment, 3-7 year terms, rates similar to SBA.

Lines of Credit: Revolving credit, interest-only payments, 8-20% rates.

Choose based on purpose, amount needed, and qualification requirements.

Current Business Loan Rates (2025)

SBA 7(a) loans: Prime Rate (7.25%) + 2.25-4.75% spread = 9.5-12% typical.

SBA 504 loans: Fixed rates around 6-8% for real estate portion.

Conventional term loans: 7-15% depending on creditworthiness and collateral.

Equipment financing: 8-12% typical.

Business lines of credit: 10-20% variable rates.

Rates vary based on: Credit score (higher = better rate), time in business (2+ years = better rate), revenue (higher = better rate), collateral offered, loan amount and term.

How Loan Term Affects Cost

Longer term = Lower monthly payment BUT more total interest.

Example: $250K at 10% for 5 years = $5,312/month, $68,748 total interest.

Same loan for 10 years = $3,303/month, $146,359 total interest (over 2× more!).

For 15 years = $2,686/month, $233,563 total interest (over 3× more!).

Choose longer term if: Cash flow is tight, need lower monthly payment.

Choose shorter term if: Can afford higher payment, want to minimize interest, build equity faster.

Most business loans: 5-10 years for working capital, 10-25 years for real estate.

Understanding APR vs Interest Rate

Interest Rate: The rate charged on the principal balance only.

APR (Annual Percentage Rate): Includes interest + fees (origination, guarantee fees, closing costs) = true cost of borrowing.

Example: $250K loan at 10% interest with 3.75% origination fee.

Simple interest rate: 10%.

Effective APR: ~10.4% (accounting for $9,375 fee).

SBA loans: Typically have 3.75% guarantee fee (for loans $150K-$500K), raising effective APR.

Always compare APR when shopping loans, not just interest rate.

SBA Loan Advantages

Lower down payment: 10% typical vs 20-30% conventional.

Longer terms: Up to 25 years vs 5-10 years conventional = lower monthly payment.

Better rates: Often 2-4% lower than conventional business loans.

Higher approval rates: SBA guarantee reduces lender risk = easier to qualify.

Flexible use: Can use for working capital, equipment, real estate, acquisitions.

Disadvantages: Slower approval (45-90 days vs 2-4 weeks), more paperwork, guarantee fees add 2.5-3.75% to loan cost, stricter requirements (2+ years in business, good credit).

Origination Fees and Closing Costs

Origination fee: One-time fee for processing loan, typically 0.5-5% of loan amount.

SBA guarantee fee: 2% for loans <$150K, 3% for $150K-$700K, 3.5% for $700K-$1M, 3.75% for $1M+.

Closing costs: Title insurance, appraisal, legal fees, environmental reports = $5K-$25K typical.

Packaging fee: Some lenders charge $500-$2,500 to prepare SBA application.

Total upfront costs: Often 3-8% of loan amount.

Example: $250K loan = $7,500-$20,000 in fees.

Can these be financed?

Some lenders roll fees into loan (you pay interest on them).

Budget accordingly - you won't receive full loan amount!

Debt Service Coverage Ratio (DSCR)

DSCR = Net Operating Income / Annual Debt Service.

Lenders typically require DSCR ≥ 1.25 (income 25% higher than debt payments).

Example: $250K loan at 10%, 10 years = $3,303/month = $39,636/year debt service.

Required annual NOI: $39,636 × 1.25 = $49,545 minimum.

If business earns $100K/year NOI: DSCR = $100K / $39,636 = 2.52 (excellent!).

If business earns $40K/year NOI: DSCR = $40K / $39,636 = 1.01 (likely denied).

Calculate DSCR before applying to know if you qualify.

How to Get the Best Business Loan Rate

Improve credit score: 720+ gets best rates (2-3% better than 650).

Increase time in business: 2+ years = better rates than startups.

Show strong revenue: $500K+ annual revenue improves rates.

Offer collateral: Real estate or equipment backing = 1-2% better rate.

Increase down payment: 20-30% down vs 10% can reduce rate 0.5-1%.

Shop multiple lenders: Rates vary 2-5% between lenders for same borrower.

Consider SBA loans: Often 2-4% lower than conventional.

Improve debt-to-income: Pay down existing debt before applying.

Have solid business plan: Shows lender you'll succeed and repay.

Sources & References

SBA - Small Business Loans
https://www.sba.gov/funding-programs/loans
Federal Reserve - Small Business Credit Survey
https://www.fedsmallbusiness.org/

SBA Loans: Government-Backed Financing for Small Business

Small Business Administration (SBA) loans are partially government-guaranteed loans that make business financing accessible to companies that might not qualify for conventional bank loans.

The SBA doesn't lend money directly—instead, it guarantees a portion of loans made by partner lenders (typically 75-85%), reducing the lender's risk and enabling them to offer more favorable terms than traditional commercial loans.

The most popular program is the SBA 7(a) loan, which can be used for almost any business purpose including working capital, equipment, real estate, refinancing, and acquisitions.

Loan amounts range up to $5 million with terms up to 25 years for real estate, 10 years for equipment, and 7 years for working capital.

Interest rates are capped at Prime Rate plus a markup (typically 2.25-4.75% depending on loan size and term), resulting in rates around 11-13% as of 2025—higher than the best conventional loans but accessible to businesses that wouldn't qualify otherwise.

The SBA 504 loan is designed specifically for major fixed assets like real estate and heavy equipment, offering even longer terms (up to 25 years) and often lower rates through a structure involving a bank loan (50%), SBA-backed debenture (40%), and borrower equity (10%).

For very small loans, the SBA Microloan program offers up to $50,000 with shorter terms and is often easier to qualify for.

SBA loan requirements are rigorous but attainable: you need a solid business plan, good personal credit (typically 680+), sufficient cash flow to support debt payments, collateral when available, and owner investment (skin in the game).

The application process takes 60-90 days on average and requires extensive documentation including tax returns, financial statements, business projections, and personal financial statements.

The key advantages of SBA loans are lower down payments (10% instead of 30%), longer terms (reducing monthly payments), and access to capital that wouldn't be available conventionally.

The disadvantages include paperwork burden, personal guarantees required from owners with 20%+ equity, and restrictions on how funds can be used.

Key Financial Terms

Understand the essential concepts behind this calculator

SBA Loan

A small business loan partially guaranteed by the U.S. Small Business Administration, offering longer terms and lower rates than conventional business loans.

Learn more →
View all financial terms in our glossary →

Frequently Asked Questions

Common questions about the SBA Loan Calculator

To use the SBA loan calculator, enter the loan amount, interest rate, and loan term. The calculator will then show you your monthly payment.
Learn More

SBA 7(a) Loan Program Details

Official program requirements, loan amounts, terms, and interest rate structures for SBA 7(a) loans.
→Source: US Small Business Administration - 7(a) Loans(2025)

SBA Loan Qualification Requirements

Credit requirements, business plan expectations, and documentation needed for SBA loan approval.
→Source: Lendio - SBA Loan Guide(2024)

SBA 7(a) vs 504 vs Microloan Programs

Side-by-side comparison of SBA loan programs to help choose the right option for your business needs.
→Source: NerdWallet - SBA Loan Types(2024)