What is the interest rate on SBA loans?

SBA 7(a) rates are typically Prime + 2.25-2.75%, currently around 7-9%. SBA 504 rates are fixed and often lower, around 6-7%. Rates vary by loan size, term, and lender.

How much can I borrow with an SBA loan?

SBA 7(a): up to $5 million. SBA 504: up to $5.5 million. SBA Microloans: up to $50,000. The actual amount depends on your business financials and collateral.

How long does an SBA loan take to get?

Typically 30-90 days from application to funding. SBA Preferred Lenders can be faster. Having all documentation ready upfront speeds the process significantly.

SBA Loan Calculator

Q: What is the SBA guarantee fee?

The SBA charges a guarantee fee of 2-3.75% of the guaranteed portion, paid at closing. For a $350,000 7(a) loan with 75% guarantee, the fee would be about $7,200.

Free SBA loan calculator. Estimate monthly payments for SBA 7(a) and SBA 504 loans with current rates, terms, and guarantee fees.

Built by Abiot Y. Derbie, PhD — Postdoctoral Research Fellow. Quantitative researcher specializing in statistical modeling and data-driven decision systems.

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SBA Programs

What are the main SBA loan programs?

7(a): most common, up to $5M, 10-25 year terms, general business purposes. 504: for major fixed assets (real estate, equipment), up to $5.5M, 10-25 years, requires a CDC. Microloan: up to $50,000, 6-year max, through nonprofit lenders. Disaster loans: for businesses affected by declared disasters. The SBA does not lend directly — it guarantees 75-85% of the loan, reducing lender risk and enabling approval for businesses that might not qualify for conventional financing.

Rate Structure

How are SBA loan rates determined?

7(a) rates are tied to the prime rate plus a spread of 2.25-2.75% (variable) or negotiated fixed rates. Current range: approximately 10-13%. 504 loans have a fixed rate on the CDC portion — often 1-2% below market rates. SBA loans are not cheap money — but they offer longer terms (10-25 years vs 5-7 conventional), lower down payments (10-20% vs 20-30%), and no balloon payments. The longer term means lower monthly payments and better cash flow even at similar interest rates.

SBA Loan Calculator: Estimate Your Small Business Loan Payment

An SBA loan calculator estimates monthly payments, total interest, and total cost for Small Business Administration-backed loans. SBA loans offer lower rates and longer terms than conventional business loans because the federal government guarantees a portion (50-85%) of the loan, reducing risk for lenders.

Enter your loan amount, SBA loan type, interest rate, and term above. The calculator shows monthly payments, total cost, and comparison to conventional business loan alternatives.

SBA Loan Programs Compared

Program	Max Amount	Max Term	Rate Range	Best For
SBA 7(a)	$5,000,000	25 years (RE), 10 years (other)	Prime + 2.25-4.75%	General business, working capital, equipment
SBA 504	$5,500,000	10, 20, or 25 years	~6.0-7.0% fixed	Real estate, heavy equipment (owner-occupied)
SBA Microloan	$50,000	6 years max	6-13%	Startups, small purchases, working capital
SBA Express	$500,000	25 yrs (RE), 10 yrs (other)	Prime + 4.5-6.5%	Fast approval (36 hours), line of credit

The SBA guaranteed $28.5 billion in 7(a) loans in fiscal year 2024 (SBA data). The average 7(a) loan size: approximately $479,000. The 504 program funded $9.2 billion in commercial real estate loans. Combined, SBA programs supported over 90,000 small business loans in 2024.

Example: $350,000 SBA 7(a) loan at 8.5% (Prime + 2.75%) for 10 years. Monthly payment: $4,335. Total interest: $170,200. Total repaid: $520,200. Compare to a conventional business loan at 12% for 5 years: $7,784/month, $117,040 interest. The SBA loan has a higher total interest cost due to the longer term but 44% lower monthly payments.

SBA Loan Requirements

Who qualifies: For-profit US businesses operating for at least 2 years (startups may qualify for microloans). Must meet SBA size standards (varies by industry, typically under 500 employees or $7.5M revenue for most industries). Owner must have invested equity in the business. Cannot obtain comparable credit elsewhere (SBA is a "lender of last resort").

Credit requirements: Most SBA lenders require a personal credit score of 680+ for 7(a) loans. Some accept 650+ with strong business financials. Microloans may accept lower scores. No bankruptcies in the past 3 years. No defaults on government debt.

Collateral: SBA loans up to $25,000 may not require collateral. Above $25,000: lenders take a lien on business assets and may require personal guarantees and a lien on personal assets. The SBA does not decline a loan solely for insufficient collateral if other factors are strong — but the personal guarantee means the owner is personally liable if the business cannot repay.

Down payment: SBA 7(a): typically 10-20%. SBA 504 (commercial real estate): 10% from borrower, 40% from conventional lender, 50% from CDC. The 10% down on commercial property is the 504's biggest advantage — conventional commercial loans require 20-35% down.

Frequently Asked Questions

What is the current SBA loan rate?

SBA 7(a) rates are variable: Prime rate + 2.25-4.75% depending on loan size and term. With Prime at approximately 7.5% in 2026: effective rates of 9.75-12.25%. SBA 504 rates are fixed at approximately 6.0-7.0%. SBA rates are significantly lower than conventional small business loans (10-15%) or merchant cash advances (20-60% effective APR). Check with SBA-approved lenders for current quotes.

How long does it take to get an SBA loan?

SBA 7(a): 2-3 months from application to funding. SBA Express: 36 hours for SBA approval, 1-2 weeks total. SBA 504: 2-4 months (involves three parties: borrower, lender, CDC). Microloans: 1-2 months. The timeline depends on document readiness — having financial statements, tax returns, business plan, and collateral documentation prepared before applying accelerates the process significantly.

Can I get an SBA loan for a startup?

Difficult but possible. Most 7(a) lenders prefer 2+ years of business history. Options for startups: SBA Microloans (up to $50,000, available to startups through nonprofit intermediaries), SBA 7(a) with a strong business plan and 20%+ owner investment, or SBA Community Advantage loans through CDFIs. Having industry experience, personal collateral, and a strong personal credit score (700+) improves startup loan approval odds.

What is the SBA guarantee fee?

The SBA charges a guarantee fee based on loan amount and term: 2-3.5% for loans over $150,000, plus 0.55% annual servicing fee on the guaranteed portion. On a $350,000 loan with 75% guarantee: upfront fee approximately $7,875-$9,188 (financed into the loan). This fee funds the SBA guarantee program that enables lenders to offer favorable terms. There is no guarantee fee on loans under $150,000.

Can I use an SBA loan to buy a business?

Yes — SBA 7(a) is the most common financing for business acquisitions. The loan covers the purchase price, working capital, and equipment. Requirements: typically 10-20% down from the buyer, seller's business must have positive cash flow, and DSCR (debt service coverage ratio) of 1.25+ on projected income. SBA 7(a) loans for acquisition can include goodwill and other intangibles — unlike conventional loans that typically finance only hard assets.

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