How SBA loan rates are set
The SBA does not lend; it guarantees loans made by banks and licensed lenders and caps what they may charge. For 7(a) loans the cap is the prime rate plus a spread that depends on the loan size and term: larger loans get smaller spreads. With prime at 7 percent in October 2026, variable-rate 7(a) loans are capped between 10 percent (loans over $350,000, prime plus 3) and 13.5 percent (loans of $50,000 or less, prime plus 6.5); fixed-rate maximums are published separately by the SBA and run higher. Express loans, decided by the lender with a 50 percent guarantee, sit toward the top of that range.
Guarantee fees are charged on the guaranteed portion of the loan, on a sliding scale from zero on smaller loans up to 3.75 percent on the largest, and are usually rolled into the loan amount. Packaging and closing costs vary by lender. None of these is in the calculator’s payment, so add them when comparing an SBA offer with a conventional one.
| Amount | 7 years | 10 years | 25 years (real estate) |
|---|---|---|---|
| $100,000 | $1,807/mo | $1,464/mo | $1,090/mo |
| $250,000 | $4,517/mo | $3,659/mo | $2,726/mo |
| $500,000 | $9,034/mo | $7,318/mo | $5,452/mo |
| $1,000,000 | $18,068/mo | $14,637/mo | $10,904/mo |
Which SBA program the calculator fits
7(a) is the general-purpose program: working capital, equipment, refinancing, acquisitions and real estate up to $5 million, terms of ten years for most uses and twenty-five for real estate. SBA Express is a faster 7(a) variant up to $500,000. 504 loans finance real estate and heavy equipment through a bank plus a certified development company, with fixed rates on the CDC portion; the calculator approximates 504 payments only roughly. Microloans up to $50,000 come from nonprofit lenders at about 6 to 8 percent and are the program that fits new businesses.
| Product | Amount to discuss | Time to fund | Pricing structure | Eligibility review |
|---|---|---|---|---|
| SBA loan | Program-specific; 7(a) maximum $5 million | Provider-dependent; confirm availability of funds | Lender-negotiated interest subject to applicable SBA program limits; fees may apply | Operating-history requirements vary by provider; Ask which personal and business credit checks apply |
| Business term loan | Provider-specific; size to repayment capacity | Provider-dependent; confirm availability of funds | Quoted interest and fees; compare net proceeds and total repayment | Operating-history requirements vary by provider; Ask which personal and business credit checks apply |
| Equipment financing | Provider-specific; size to repayment capacity | Provider-dependent; confirm availability of funds | Loan interest or lease payments; compare deposit, fees and ownership terms | Operating-history requirements vary by provider; Ask which personal and business credit checks apply |
| Business line of credit | Provider-specific; size to repayment capacity | Provider-dependent; confirm availability of funds | Interest or installment fees by provider; check draw and maintenance charges | Operating-history requirements vary by provider; Ask which personal and business credit checks apply |
What it takes to qualify
Two or more years in business with filed returns showing the business can cover the payment about 1.25 times, personal credit around 650 and up, an owner equity stake, no recent bankruptcies or defaults on government debt, and a complete package: returns, interim financials, a debt schedule, a business plan or use-of-funds narrative, resumes, leases and collateral details. Lack of collateral alone should not cause a decline, but available collateral is taken. The process runs 30 to 90 days; the requirements guide on this site has the full list.
When an SBA loan is not the right answer
When the money is needed in days, when the business is under two years old or not yet profitable on its returns, when the amount is small enough that a line of credit covers it, or when the owner cannot or will not provide a personal guarantee and collateral. In those cases a conventional term loan, equipment financing or a line of credit funds faster at a higher annual cost, and the SBA loan can follow later as a refinance.