SBA Loan Calculator
Calculate SBA 7(a), 504, and Microloan payments with guarantee fees and eligibility info.
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About This Calculator
The SBA Loan Calculator helps small business owners estimate monthly payments, total interest, and qualification requirements for Small Business Administration-backed loans in 2026. SBA loans offer lower rates and longer terms than conventional business financing, making them the gold standard for small business funding. With the Prime Rate at 7.50% in early 2026 following Federal Reserve rate adjustments, SBA loans remain attractive with rates ranging from 9.75% to 11% for most qualified borrowers. The SBA guarantees a portion of these loans (50-85%), reducing lender risk and making banks more willing to approve small business financing that would otherwise be declined. Whether you're starting a new business, expanding operations, purchasing equipment, acquiring commercial real estate, or buying an existing business, SBA loans provide access to capital with manageable terms. Enter your loan amount, rate, and term to see payment breakdowns for 7(a), 504, Microloan, and Express loan programs—and understand the requirements to qualify.
How to Use the SBA Loan Calculator
- 1Select your SBA loan type (7(a), 504, Microloan, or Express).
- 2Enter the loan amount you need (up to program maximums).
- 3Input the interest rate (typically Prime + 2.25% to 2.75% for 7(a)).
- 4Set the loan term based on use of funds (up to 25 years for real estate).
- 5Review monthly payments, total interest, and amortization schedule.
- 6Compare different loan structures to find the best fit for your business.
- 7Analyze total cost of borrowing including fees and interest.
- 8Explore different scenarios by adjusting loan amounts and terms.
- 9Review eligibility requirements for your chosen program.
- 10Export or print results to discuss with SBA-approved lenders.
Formula
Monthly Payment = [P × r × (1+r)^n] / [(1+r)^n - 1]This standard amortization formula calculates your monthly payment based on principal (P), monthly interest rate (r = APR/12), and number of payments (n). SBA loans use the same calculation as conventional loans but with government-guaranteed terms that result in lower rates and longer repayment periods, making monthly payments more manageable for small businesses.
The History and Impact of SBA Loans
The Small Business Administration: 70+ Years of Empowering Entrepreneurs
The U.S. Small Business Administration was created in 1953 under President Dwight D. Eisenhower to help American small businesses succeed. Since then, the SBA has helped millions of entrepreneurs access capital they could not obtain through traditional lending channels.
By the Numbers (2026):
- Over 33 million small businesses operate in the U.S. today
- SBA loans have helped create millions of jobs nationwide
- The 7(a) program alone guarantees over $28 billion in loans annually
- Average 7(a) loan size: approximately $480,000
- SBA-backed businesses have a higher survival rate than non-SBA peers
- 504 loans exceeded $7 billion in FY2025
Why SBA Loans Matter: Banks are often reluctant to lend to small businesses due to perceived risk. The SBA does not lend money directly in most cases. Instead, it guarantees a portion of loans made by approved lenders (50-85%), reducing lender risk and making banks more willing to approve small business financing.
The SBA Advantage Over Conventional Loans:
- Lower interest rates than conventional business loans
- Longer repayment terms (up to 25 years vs. 5-7 years conventional)
- Lower down payments (as low as 10% vs. 20-30% conventional)
- No balloon payments or prepayment penalties on most loans
- Counseling and resources for business owners
- More flexible qualification requirements
SBA Loan Types and Maximum Amounts (2026)
1. SBA 7(a) Loan - The Most Popular Option
- Maximum amount: $5,000,000
- Terms: Up to 10 years (working capital), 25 years (real estate)
- Interest rates: Prime + 2.25% to Prime + 2.75% (variable)
- Current rates (Jan 2026): 9.75% - 10.25% typical
- Use for: Working capital, equipment, real estate, refinancing, acquisitions
- Down payment: Typically 10-20%
- Guarantee: Up to 85% for loans under $150,000; 75% for larger loans
- Processing time: 30-90 days typical
2. SBA 504 Loan - Real Estate and Equipment
- Maximum SBA portion: $5,500,000 (up to $5.5M for certain projects)
- Total project size: Can exceed $12 million
- Terms: 10 years (equipment), 20-25 years (real estate)
- Interest rates: Fixed, based on Treasury rates (often 0.5-1% below 7(a) rates)
- Use for: Owner-occupied commercial real estate, heavy equipment
- Structure: 50% bank loan, 40% CDC/SBA, 10% borrower equity
- Requires job creation: 1 job per $65,000 borrowed (or meet public policy goals)
- Processing time: 45-90 days
3. SBA Microloan Program
- Maximum amount: $50,000 (average loan: ~$15,000)
- Terms: Up to 6 years
- Interest rates: 8-13% (set by intermediary lenders)
- Use for: Working capital, inventory, supplies, equipment
- Best for: Startups and very small businesses
- No real estate purchases allowed
- Processing time: 1-4 weeks
4. SBA Express Loan
- Maximum amount: $500,000
- Terms: Up to 10 years (working capital), 25 years (real estate)
- Interest rates: Prime + 4.5% to Prime + 6.5% (higher than standard 7(a))
- Current rates (Jan 2026): 12% - 14% typical
- Approval time: 36-72 hours (vs. weeks for standard SBA)
- Guarantee: 50% (lower than standard 7(a))
- Best for: Urgent funding needs, lines of credit
Current SBA Interest Rates Explained (2026)
How SBA Rates Are Set:
SBA loan rates are tied to the Prime Rate plus a spread. The Prime Rate is the base rate banks charge their most creditworthy customers, currently published in the Wall Street Journal.
Maximum Allowable Spreads (7(a) Program):
| Loan Amount | Maturity | Max Spread | Current Max Rate* |
|---|---|---|---|
| $50,000 or less | < 7 years | Prime + 4.25% | 11.75% |
| $50,000 or less | 7+ years | Prime + 4.75% | 12.25% |
| $50,001 - $250,000 | < 7 years | Prime + 3.25% | 10.75% |
| $50,001 - $250,000 | 7+ years | Prime + 3.75% | 11.25% |
| $250,001 - $350,000 | Any | Prime + 2.25% | 9.75% |
| Over $350,000 | Any | Prime + 2.25% | 9.75% |
*Based on Prime Rate of 7.50% as of January 2026
Example Rate Calculation:
- Current Prime Rate: 7.50%
- Loan amount: $500,000
- Maximum rate: 7.50% + 2.25% = 9.75%
Variable vs. Fixed:
- 7(a) loans: Usually variable (adjust quarterly or monthly with Prime)
- 504 loans: Fixed for the entire term (a significant advantage)
- Express loans: Variable, with higher spreads
- Microloans: Often fixed by intermediary lender
Rate Shopping Tip: Lenders can charge LESS than the maximum spread. Always negotiate and compare multiple SBA-approved lenders. Rate differences of 0.25-0.50% can save thousands over the loan term.
SBA Loan Payment Examples (2026)
Example 1: $250,000 7(a) Loan for Equipment
- Interest rate: 9.75% (Prime 7.50% + 2.25%)
- Term: 10 years
- Monthly payment: $3,275
- Total interest paid: $143,000
- Total repayment: $393,000
Example 2: $500,000 7(a) Loan for Working Capital
- Interest rate: 9.75%
- Term: 10 years
- Monthly payment: $6,550
- Total interest paid: $286,000
- Total repayment: $786,000
Example 3: $1,000,000 504 Loan for Commercial Real Estate Structure:
- Bank loan (50%): $500,000 at 8.0% for 20 years = $4,182/month
- SBA/CDC portion (40%): $400,000 at 6.5% for 25 years = $2,700/month
- Borrower equity (10%): $100,000 (your down payment)
- Combined payment: $6,882/month
- Lower than equivalent 7(a) due to fixed rate and longer term
Example 4: $35,000 Microloan for Startup
- Interest rate: 9.5%
- Term: 5 years
- Monthly payment: $734
- Total interest paid: $9,040
- Total repayment: $44,040
Example 5: $200,000 Express Line of Credit
- Interest rate: 12% (Prime 7.50% + 4.5%)
- Draw $100,000 for 12 months (interest-only)
- Monthly interest-only: $1,000/month
- Flexible repayment as cash flow allows
Example 6: $2,000,000 7(a) for Business Acquisition
- Interest rate: 9.75%
- Term: 10 years
- Monthly payment: $26,200
- Total interest: $1,144,000
- Down payment required: $200,000-$400,000 (10-20%)
SBA Loan Eligibility Requirements
Basic Eligibility (All SBA Loans):
-
Business Size: Must meet SBA size standards
- Most industries: Under $7.5M - $47M annual revenue (varies by NAICS code)
- Or under 500-1,500 employees depending on industry
- Use the SBA Size Standards Tool at sba.gov
-
For-Profit Business: Non-profits do not qualify
-
U.S. Operation: Business must operate in the United States or its territories
-
Owner Investment: Must have reasonable equity invested (skin in the game)
-
Exhausted Alternatives: Must have sought other financing first
Credit Requirements:
- Minimum credit score: 650-680+ (varies by lender)
- No recent bankruptcies (typically 3+ years discharged)
- No current delinquencies on government debt (taxes, student loans)
- Clean criminal background for owners with 20%+ stake
Financial Requirements:
- Positive cash flow or clear path to profitability
- Debt service coverage ratio (DSCR): 1.15x - 1.25x minimum
- Business financial statements (P&L, balance sheet)
- Collateral may be required but SBA cannot decline solely for lack of collateral
Ineligible Businesses:
- Gambling enterprises
- Lending or investment companies
- Multi-level marketing businesses
- Political or lobbying organizations
- Businesses engaged in illegal activities
- Real estate developers (for speculative investment)
- Life insurance companies
- Pyramid sales plans
The SBA Loan Application Process
Timeline: 30-90 Days (7(a)) | 45-90 Days (504) | 36-72 Hours (Express)
Step 1: Preparation (Week 1-2)
- Gather financial documents (see documentation checklist below)
- Review credit reports and address issues
- Prepare business plan (especially for startups or acquisitions)
- Determine exact loan amount and detailed use of funds
- Calculate your debt service coverage ratio
Step 2: Find an SBA Lender (Week 2-3)
- Use SBA Lender Match at sba.gov
- Contact multiple SBA-preferred lenders
- Compare rates, fees, and processing times
- Consider SBA-approved banks, credit unions, and CDCs
- Ask about their approval rates and experience
Step 3: Submit Application (Week 3-4)
- Complete SBA Form 1919 (Borrower Information)
- Submit all required documentation
- Provide personal financial statements (SBA Form 413)
- Business financial projections if startup
- Letter explaining use of funds
Step 4: Underwriting (Week 4-8)
- Lender reviews financials and business viability
- Credit analysis and cash flow verification
- Collateral appraisal (if real estate involved)
- SBA review and approval of guarantee
- Additional documentation requests (common)
Step 5: Closing (Week 8-12)
- Final loan documents prepared
- Closing costs paid (typically 2-5% of loan)
- Funds disbursed (may be staged for construction)
- Begin monthly payments (usually 30-60 days after closing)
Documentation Checklist:
- 3 years business tax returns
- 3 years personal tax returns (all 20%+ owners)
- Year-to-date P&L and balance sheet
- Business licenses and registrations
- Lease agreements
- Business plan with projections
- Personal financial statement
- Resumes of key owners
- Debt schedule
SBA Loan Fees and Costs
SBA Guarantee Fees (2026):
The SBA charges a guarantee fee based on loan amount and term:
| Loan Amount | Term ≤ 12 months | Term > 12 months |
|---|---|---|
| $150,000 or less | 0% | 0%* |
| $150,001 - $700,000 | 0% | 0.55% of guaranteed portion |
| $700,001 - $1,000,000 | 0% | 1.05% of guaranteed portion |
| Over $1,000,000 | 0% | 2.00% of guaranteed portion + 0.55% for portion over $1M |
*Fee waived for small loans under new 2026 SBA rules
Example Fee Calculation:
- Loan: $750,000, 10-year term
- Guaranteed portion: 75% = $562,500
- Guarantee fee: $562,500 × 1.05% = $5,906
Other Closing Costs:
| Cost Type | Typical Range | Notes |
|---|---|---|
| Lender origination fee | 0-2% | Negotiable |
| Appraisal (if real estate) | $2,000-$5,000 | Required for property |
| Environmental review | $500-$5,000 | For real estate |
| Legal/closing fees | $2,000-$5,000 | Attorney costs |
| Title insurance | 0.5-1% of property | For real estate |
| Recording fees | $200-$500 | Government filing |
| Credit reports | $50-$100 | Per borrower |
| UCC filing | $100-$300 | Security interest |
Total Closing Cost Estimate: 2-5% of loan amount
These fees can often be financed into the loan if equity allows.
504 vs 7(a): Which SBA Loan is Right for You?
Choose SBA 7(a) When:
- You need working capital or inventory financing
- You want maximum flexibility in fund use
- Your project is under $5 million total
- You need funds quickly (faster processing)
- You're not purchasing significant real estate or equipment
- Job creation isn't a primary focus
Choose SBA 504 When:
- You're purchasing owner-occupied commercial real estate
- You're buying heavy equipment with 10+ year useful life
- You want a fixed interest rate (504 locks in rate)
- Your project can meet job creation requirements
- You have at least 10% down payment available
- You want the lowest possible rate
Comparison Table:
| Feature | 7(a) | 504 |
|---|---|---|
| Max amount | $5M | $5.5M SBA portion |
| Interest rate | Variable (Prime+) | Fixed (Treasury-based) |
| Max term | 25 years | 25 years |
| Down payment | 10-20% | 10% |
| Working capital | Yes | No |
| Equipment | Yes | Yes (10-year life min) |
| Real estate | Yes | Yes (must occupy 51%+) |
| Job creation | Not required | Required |
| Processing time | 30-90 days | 45-90 days |
| Prepayment penalty | First 3 years (15yr+ loans) | First 10 years (declining) |
Hybrid Approach: Many businesses use a 504 loan for real estate and a 7(a) loan for working capital or equipment in the same transaction.
Pro Tips
- 💡Prepare your documentation before approaching lenders—have 3 years of tax returns, current financial statements, and a clear business plan ready.
- 💡Check your credit reports from all three bureaus and dispute any errors at least 60 days before applying.
- 💡Build relationships with SBA-preferred lenders in your area—they have streamlined processes and more SBA experience.
- 💡Calculate your debt service coverage ratio (DSCR) before applying—most lenders require at least 1.15x-1.25x.
- 💡Consider the SBA Lender Match tool at sba.gov to connect with multiple approved lenders and compare offers.
- 💡If declined, ask for specific reasons and address them—many successful SBA borrowers were initially declined.
- 💡For real estate purchases, compare 504 loans to 7(a)—the fixed rate on 504 loans often results in lower total costs.
- 💡Keep personal and business finances separate—strong business banking history demonstrates financial management skills.
- 💡Be prepared for personal guarantees—owners with 20% or more stake will personally guarantee the loan.
- 💡Have a backup plan—if traditional SBA lenders decline, consider SBA Community Advantage lenders who specialize in underserved markets.
- 💡Negotiate with multiple lenders—SBA rates have maximum spreads, but lenders can charge less. Shopping saves thousands.
- 💡Consider an SBA Express loan if you need funding quickly—approval in 36-72 hours, though rates are higher.
Frequently Asked Questions
Most SBA lenders require a minimum credit score of 650-680, though some may work with scores as low as 620 for strong applications with excellent collateral and cash flow. Higher scores (700+) qualify for better rates and faster approvals. The SBA itself does not set a minimum score, but individual lenders have their own requirements. Focus on paying down debt and fixing errors on your credit report before applying.
