SBA Loan Calculator
Calculate monthly payment and upfront guarantee fee on an SBA 7(a) loan.
Updated · By Teodor-Cristian Lutoiu
An SBA 7(a) loan is a bank loan with a partial guarantee from the Small Business Administration. The monthly payment is a standard amortization; the SBA adds an upfront guarantee fee of 1.7–3.75% of the guaranteed portion (FY2025), which the lender almost always passes to the borrower and which can be financed into the loan.
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See also
How SBA loans work
An SBA loan is a loan from a conventional bank or credit union, with a partial guarantee from the U.S. Small Business Administration against default. The guarantee lowers the lender's risk, which means they can lend to businesses that wouldn't qualify for a conventional commercial loan — smaller companies, less collateral, shorter operating history.
Three common SBA loan programs:
- SBA 7(a) — the workhorse. Up to $5M, 7–25 year terms, variable or fixed rate tied to Prime + a spread. Used for working capital, equipment, real estate, debt refinance, business acquisition.
- SBA 504 — fixed-rate, long-term, specifically for major fixed assets (commercial real estate, heavy equipment). Structured as 50% bank loan + 40% SBA-guaranteed CDC loan + 10% borrower down payment.
- SBA Express — smaller ($500k ceiling), faster approval, typically higher rate.
This calculator models SBA 7(a) — the most common. It's a standard amortizing loan with one twist: an upfront guarantee fee that the SBA charges the lender (who almost always passes it on to you).
FY2025/2026 guarantee fees
The guarantee fee is computed on the guaranteed portion of the loan, not the full loan amount. The SBA guarantees 85% of loans under $150,000 and 75% of loans above that. Fee brackets for the current fiscal year:
| Loan amount | Guarantee fee |
|---|---|
| Up to $1,000,000 | 0% — fee waiver (FY25 Congressional extension) |
| $1,000,001 – $2,000,000 | 1.45% of guaranteed portion |
| Over $2,000,000 | 1.7% of guaranteed portion |
Loans over $1M also have an ongoing 0.55% annual servicing fee. The calculator models only the upfront fee; ongoing fees are paid by the lender (usually passed through as a slightly higher effective rate rather than a separate line item).
Fees change. Check SBA.gov or ask your lender for the current schedule before closing. The calculator input lets you override defaults.
Formula
The monthly payment uses the standard amortization formula:
monthly_payment = principal × (r × (1+r)^n) / ((1+r)^n − 1)
With r = APR ÷ 12, n = years × 12.
The upfront guarantee fee is additive:
guaranteed_amount = loan_amount × guaranteed_fraction
upfront_fee = guaranteed_amount × fee_percent
total_cost_with_fee = (monthly_payment × n) + upfront_fee
The fee is usually rolled into the loan (financed), but some lenders collect it in cash at closing. Rolled-in fees slightly increase your monthly payment; upfront-paid fees preserve the quoted payment but require more cash at closing.
Scenarios at a glance
SBA 7(a) examples at 10.5% APR (a typical 2025 rate, prime + spread) using FY2025 guarantee fee brackets:
| Loan amount | Term | Monthly payment | Upfront guarantee fee |
|---|---|---|---|
| $250,000 | 10 years | $3,372 | ~$3,700 |
| $500,000 | 15 years | $5,527 | ~$11,000 |
| $1,000,000 | 25 years | $9,441 | ~$27,000 |
Fees are computed on the guaranteed portion of the loan (75–85% depending on size), not the full loan amount. Always ask the lender to quote it separately.
Worked example
Priya is buying existing inventory and a commercial laundry route for her expansion. She's approved for a $500,000 SBA 7(a) at 10.75% (Prime 8.5% + 2.25% spread) over 10 years. SBA guarantees 75%.
- Loan amount: $500,000
- Rate: 10.75%
- Term: 10 years
- Guarantee fee: 0% (under $1M, waived under FY25)
- SBA-guaranteed fraction: 75%
Calculator output:
- Monthly payment: $6,819
- Total interest over 10 years: $318,226
- Upfront guarantee fee: $0 (waived under $1M)
- Total cost: $818,226
If the fee waiver expires and Priya's loan is subject to a 3% guarantee fee on the guaranteed portion: guaranteed = $375,000 × 3% = $11,250 upfront, bringing total cost to $829,476 over the life of the loan.
FAQ
Is the guarantee fee the same as an origination fee?
No. The guarantee fee is paid to the SBA by the lender (and typically passed to you). Origination fees are separate lender charges for processing the loan — another 1-3% of the loan, depending on the lender. Both are due at closing; many borrowers finance both into the loan.
Can I prepay without penalty?
On SBA 7(a) loans with terms of 15 years or more, there's a declining prepayment penalty in the first 3 years: 5% of the prepaid amount in year 1, 3% in year 2, 1% in year 3, then free after. Shorter-term loans have no prepayment penalty. Check your Authorization document for the exact schedule.
What rate should I expect?
SBA 7(a) rates are Prime + spread. Maximum allowed spreads as of 2026:
- Up to $50,000: Prime + 6.5%
- $50,001–$250,000: Prime + 6%
- Over $250,000: Prime + 2.75% (non-real-estate) or 2.25% (real estate)
If Prime is 8.5%, expect rates in the 10.75% – 14.5% range depending on loan size. Fixed-rate SBA 7(a) loans exist but are rarer and priced higher than variable.
Do I need collateral?
For loans over $25,000, the SBA requires the lender to collateralize the loan to the extent available — liens on business assets, commercial real estate, personal guarantee from owners with 20%+ stake. For under $25,000, no collateral is required.
How long does SBA approval take?
SBA 7(a): typically 30-90 days from complete application to closing. SBA Express: 7-30 days. Prep work (financial statements, projections, purchase agreements) adds time on the borrower side.
What's the difference between SBA 7(a) and SBA 504?
7(a) is broad-use, structured as a single loan with variable or fixed rates. 504 is specifically for fixed assets (real estate, major equipment), structured as a three-party loan (bank + CDC + borrower) with long-term fixed rates typically lower than 7(a). Use 7(a) for working capital, acquisition, multi-purpose financing. Use 504 for owner-occupied commercial real estate purchases.
Last updated: April 23, 2026