SBA Loan Calculator: 7(a) and 504
Work out the real cost of an SBA 7(a) or 504 loan — monthly payment, the SBA guarantee fee, total interest over the term, and what it all adds up to. Guarantee fees change by programme and loan size, so enter the rate your lender quoted you.
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That payment has to come out of your monthly cash flow. Book a free 30-minute call and an Ex-PwC Chartered Accountant will pressure-test whether your business can service it — before you sign.
Book Your Free 30-Min Call →How the SBA Guarantee Fee Works
An SBA loan is made by a bank, not by the SBA. The SBA guarantees a portion of it, and charges a one-time guarantee fee for that protection. The fee is a percentage of the guaranteed portion, not the whole loan, and it scales with loan size and term — small short-term loans can carry no fee at all, while large long-term loans carry the most.
Fee percentages are set by the SBA and revised periodically, so this calculator takes the rate as an input rather than assuming one. Ask your lender for the exact figure on your term sheet and enter it here. Most lenders roll the fee into the loan rather than asking for it upfront, which is why the Net Cash Received figure above is usually less than the amount you applied for.
7(a) vs 504 — Which Applies to You
- 7(a) is the general-purpose programme: working capital, equipment, refinancing existing debt, or buying a business. Rates are usually variable and pegged to prime plus a spread.
- 504 is for fixed assets — commercial real estate and heavy equipment. It splits across a bank loan, a CDC debenture and your down payment, and the CDC portion carries a fixed rate.
If you are financing a purchase across both, run the calculator twice and add the payments.
The Number That Actually Matters
Lenders underwrite on debt service coverage — your cash flow available for debt service divided by your annual loan payments. Most SBA lenders want at least 1.15x, and many want 1.25x. Take the monthly payment above, multiply by twelve, and divide your annual cash flow by it. If you land under 1.15, the application is likely to struggle regardless of how good the business looks otherwise. Our cash flow forecast calculator will give you the numerator.
Frequently Asked Questions
How much of an SBA loan payment is interest at the start?
Because SBA loans amortise, early payments are mostly interest and late payments are mostly principal. On a 10-year loan at around 11%, roughly three-quarters of your first payment goes to interest. Use our amortization schedule calculator to see the month-by-month split.
Is the SBA guarantee fee tax deductible?
Loan fees are generally amortised over the life of the loan rather than deducted in full in year one, and treatment depends on your entity and circumstances. Confirm with your CPA before filing.
Can I pay an SBA loan off early?
7(a) loans with terms of 15 years or more carry a prepayment penalty in the first three years. Shorter-term 7(a) loans generally do not. Check your specific note.
What does 'net cash received' mean?
The loan amount minus the guarantee fee and closing costs, when those are deducted from the proceeds rather than paid separately. It is the money that actually lands in your account.