How to use this SBA loan calculator
Pick a program and the calculator pre-fills a typical loan amount, term, and the current SBA maximum interest rate for that size of loan. Adjust the amount and term to match your project. If a lender has quoted you a rate below the cap, type it over the suggested figure. Leave the guarantee fee box ticked to see what the loan really costs once the SBA's upfront fee is counted, and add any packaging or closing fees your lender has disclosed.
The 504 option models the CDC debenture (40% of the project) because that is the part with an SBA-set fixed rate. The bank's first mortgage on the other 50% is a conventional loan; run it through the business loan calculator and add the two payments.
SBA loan programs compared
| Program | Max amount | Typical use | Term | Rate (Sept 2026) | SBA guarantee |
|---|---|---|---|---|---|
| 7(a) Standard | $5,000,000 | Working capital, equipment, acquisitions, real estate | Up to 10 yr (25 yr real estate) | Variable, capped at Prime + 3.0% to 6.5% by size | 85% ≤ $150k; 75% above |
| 7(a) Small | $350,000 | Same as above, streamlined underwriting | Up to 10 yr (25 yr real estate) | Same caps as 7(a) | 85% ≤ $150k; 75% above |
| SBA Express | $500,000 | Working capital, lines of credit; fast decisions | Up to 10 yr (lines up to 10 yr) | Capped at Prime + 4.5% (+ 6.5% ≤ $50k) | 50% |
| 504 | $5,000,000 ($5.5M manufacturing/energy) | Owner-occupied real estate, heavy equipment | 10, 20, or 25 yr | Fixed: 6.60% / 6.53% / 6.54% | CDC debenture 100% SBA-backed |
| Microloan | $50,000 | Startups, inventory, small equipment | Up to 7 yr | 8% – 13% (set by intermediary) | n/a (funded via nonprofit lenders) |
All programs require the business to be for-profit, U.S.-based, within SBA size standards, and unable to get comparable credit elsewhere on reasonable terms. Owners of 20% or more personally guarantee the loan.
How SBA 7(a) rates are set
The SBA does not lend money under 7(a); banks and credit unions do, with the SBA guaranteeing part of the loan. The SBA's role on pricing is to set a ceiling. For variable-rate loans the ceiling is a base rate plus a spread, and since 2023 the spread depends only on the loan size:
| Loan amount | Maximum spread | Cap with Prime at 7.00% |
|---|---|---|
| Up to $50,000 | Prime + 6.5% | 13.50% |
| $50,001 – $250,000 | Prime + 6.0% | 13.00% |
| $250,001 – $350,000 | Prime + 4.5% | 11.50% |
| Over $350,000 | Prime + 3.0% | 10.00% |
The base rate is usually the Wall Street Journal prime rate, which moved to 7.00% on September 17, 2026, though lenders may use the one-month SOFR plus 3% or the SBA optional peg rate instead. Variable loans typically reset quarterly, so when the Federal Reserve moves, your payment follows within about three months. Fixed-rate 7(a) loans are allowed and carry higher caps (Prime + 5% to + 8% depending on size), and lenders offer them less often.
Smaller loans have higher caps because they cost about the same to underwrite and service as large ones. In practice most lenders price at or close to the cap on loans under $350,000. Above that, competition among Preferred Lenders means well-qualified borrowers routinely get Prime + 2% or better.
504 rates work differently. Every month, Certified Development Companies pool their approved projects and sell 10-, 20-, and 25-year debentures on the bond market. The rate is set off the matching Treasury yield plus a fixed increment and is locked for the life of the loan. The September 2026 pricing (settled September 10) produced effective rates of 6.60% for 10-year, 6.53% for 20-year, and 6.54% for 25-year debentures, including the ongoing servicing fees. That is 3.5 points under the 7(a) cap for a large loan, which is why 504 wins for real estate when the business qualifies.
The guarantee fee
Because the SBA insures the lender against default, it charges the borrower an upfront guaranty fee. The fee is set each fiscal year and is calculated on the guaranteed portion, not the full loan. For FY2026 (loans approved October 1, 2025 through September 30, 2026):
| Gross loan amount | Guaranteed portion | Upfront fee |
|---|---|---|
| Up to $150,000 | 85% | 2.00% of guaranteed portion |
| $150,001 – $700,000 | 75% | 3.00% of guaranteed portion |
| $700,001 – $5,000,000 | 75% | 3.50% of the first $1,000,000 guaranteed + 3.75% of the rest |
| Any size, term ≤ 12 months | 85% / 75% | 0.25% of guaranteed portion |
Worked examples:
- $100,000 7(a) loan: guaranteed portion $85,000 × 2% = $1,700 (1.7% of the loan).
- $500,000 7(a) loan: guaranteed portion $375,000 × 3% = $11,250 (2.25% of the loan).
- $2,000,000 7(a) loan: guaranteed portion $1,500,000; $1,000,000 × 3.5% + $500,000 × 3.75% = $53,750 (2.69% of the loan).
Two FY2026 exceptions are worth knowing: 7(a) loans of $950,000 or less to small manufacturers pay 0%, and SBA Express loans to veteran-owned businesses pay 0%. The calculator does not apply these automatically; untick the fee box if you qualify.
Almost every borrower finances the fee into the loan rather than paying cash, which means you pay interest on it too. The calculator treats it as a cost deducted from your proceeds, which is how it feeds into the effective APR. On the $500,000 example at 10% over 10 years, the fee lifts the effective APR from 10.00% to about 10.55%. Lenders may also charge a packaging fee (typically $2,000 to $5,000 on 7(a) loans; SBA caps what can be passed through) and pass along closing costs on real estate.
504 loans have their own fee structure, roughly 2.15% of the debenture plus ongoing servicing, but they are built into the effective debenture rate shown, so no separate fee line appears for that program.
Eligibility basics
- For-profit, operating in the U.S., and within the SBA size standard for your industry (most service businesses qualify under the $8 million to $47 million revenue thresholds; alternative standard: tangible net worth under $20 million and two-year average net income under $6.5 million).
- Owner equity. Lenders generally want 10% down on purchases and startups, and reasonable equity on the balance sheet for existing businesses.
- Credit. No fixed minimum, but most lenders look for a personal score around 650 or higher and no recent federal debt delinquency, including student loans.
- Cash flow. Debt service coverage of at least 1.15× on historical or well-supported projected cash flow; many banks want 1.25×.
- Ineligible businesses include lenders, speculative real estate, gambling, pyramid sales, and businesses with an owner who is incarcerated or on probation.
What lenders will ask for
Have these ready before you apply and the process moves weeks faster:
- Three years of business tax returns and year-to-date financials: a current profit and loss statement and balance sheet, plus an aging of receivables and payables.
- Three years of personal tax returns and a personal financial statement (SBA Form 413) for every 20%+ owner.
- Business debt schedule listing every existing loan, balance, payment, and collateral.
- A short business plan with projections for startups, acquisitions, or expansions.
- Purchase agreement, lease, or contractor bids if the loan funds a specific asset.
- Entity documents: articles, operating agreement or bylaws, licences, and an ownership chart.
Timeline
| Program | SBA decision | Typical time to funding |
|---|---|---|
| SBA Express | 36 hours | 2 – 4 weeks |
| 7(a) via Preferred Lender (PLP) | Delegated to lender | 30 – 60 days |
| 7(a) via non-delegated lender | 5 – 10 business days at SBA | 45 – 90 days |
| 504 | CDC + SBA review | 60 – 90 days; longer with appraisal or environmental review |
| Microloan | Intermediary decides | 2 – 6 weeks |
The clock starts when the application is complete. Missing documents, not SBA processing, are the most common cause of delay.
Worked example: 7(a) vs. 504 for a $1.2 million building
A dental practice wants to buy its $1,200,000 office building. It can put 10% down either way.
Option A: 7(a). Borrow $1,080,000 at Prime + 3% = 10.00%, 25 years.
| Item | Amount |
|---|---|
| Monthly payment | $9,813.97 |
| Guarantee fee (75% guaranteed = $810,000 × 3.5%) | $28,350 |
| Total interest over 25 years | about $1,864,000 |
| Effective APR with fee | about 10.35% |
Option B: 504. Bank first mortgage $600,000 at 8.00% for 25 years, plus CDC debenture $480,000 at 6.54% fixed for 25 years.
| Item | Amount |
|---|---|
| Bank payment | $4,630.90 |
| CDC payment | $3,253.00 |
| Combined monthly payment | $7,883.90 |
| CDC fees (about 2.15% of debenture, financed) | about $10,300 |
| Total interest over 25 years | about $1,285,000 |
The 504 structure saves about $1,930 a month and roughly $580,000 in interest over the life of the loan, and 40% of the debt is fixed while the 7(a) rate floats. The trade-offs: 504 takes longer to close, requires the business to occupy at least 51% of the building, cannot fund working capital, and carries a prepayment premium on the debenture for the first half of the term. If the practice also needed $200,000 of working capital, 7(a) could bundle it in; 504 could not.
Alternatives if an SBA loan is not the right fit
- Conventional bank term loan. Faster, fewer forms, no guarantee fee, but shorter terms (3 to 10 years) and stricter collateral. Best for established businesses with strong statements.
- Online term loans. Funding in days at 14% to 35%+ APR. Reasonable for bridging a gap while an SBA application is pending; expensive as permanent financing.
- Equipment financing. The asset is the collateral, approvals are quick, and rates of 7% to 15% are common. Compare against 7(a) for equipment over $250,000.
- Business line of credit. Better than a term loan for seasonal or receivables-driven needs. SBA Express lines are available up to $500,000.
- CDFI and state programs. Community Development Financial Institutions and state economic development agencies lend to businesses that fall just outside bank criteria, often at rates near SBA levels.
Whatever route you take, compare offers on effective APR with all fees included, not the headline rate. The business loan calculator does that for any non-SBA quote.