What is the difference between SBA 7(a) and SBA 504 loans?

SBA 7(a) loans offer up to $5 million for almost any business purpose with terms up to 10 years (25 for real estate). SBA 504 loans are for fixed assets like real estate or major equipment, up to $5.5 million, with a structure where a bank covers 50%, the SBA-backed CDC covers 40%, and the borrower puts 10% down.

How are SBA guarantee fees calculated?

SBA guarantee fees are based on the guaranteed portion of the loan. For 7(a) loans up to $150,000, the SBA guarantees 85% at a 2.0% fee. Above $150,000, the guarantee is 75% with fees from 3.0% to 3.75%. An annual servicing fee of 0.55% also applies.

What credit score do I need for an SBA loan?

Most SBA lenders require a personal credit score of 680 or higher, though some accept 650. A score of 720+ provides the best rates. Lenders also evaluate time in business, revenue, DSCR, and collateral.

How long does it take to get an SBA loan?

SBA loans typically take 30 to 90 days from application to funding. SBA 7(a) through preferred lenders can close in 2-3 weeks. SBA 504 loans take 60-90 days. Conventional business term loans can fund in 1-7 days with higher rates.

Are SBA loan rates lower than conventional business loans?

Yes, SBA loans generally offer lower rates. SBA 7(a) rates are typically Prime plus 2.25-2.75%, roughly 7-10%. SBA 504 rates can be even lower. Conventional online lender term loans typically range from 10-25%. The tradeoff is more documentation and longer closing times.

SBA Loan Payment Calculator

Calculate your estimated monthly payment for SBA 7(a) or 504 loans. Includes the SBA upfront guarantee fee, annual servicing fee, down payment, net proceeds, and a side-by-side comparison with conventional loan terms. Select your loan purpose, amount, and rate to see the full cost breakdown.

100% FreeNo SignupInstant Results

Estimate your monthly payment, SBA guarantee fees, and total cost for 7(a) or 504 loans. See how SBA financing compares to conventional business loans.

Fee schedules reflect current SBA guidelines. Actual rates and terms vary by lender.

Most flexible SBA program. Use for working capital, equipment, real estate, acquisition, or refinancing.

Total Project Cost

SBA 7(a) loans range from $25,000 to $5,000,000.

Interest Rate: 8.5%

4%13%

SBA 7(a) rates are typically Prime + 2.25% to 2.75%.

Loan Term

Down Payment: 10% ($50,000)

10%30%

SBA loans typically require 10% to 20% down.

Loan Purpose

Your SBA 7(a) Loan Estimate

Monthly Payment

$5,705

Total Interest

$224,462

over 10 years

Down Payment

$50,000

10% of $500,000

Total Cost (payments + fees + down payment)

$744,077

You save vs. conventional

$128,204

SBA 7(a) Fee Breakdown

Loan Amount (after down payment)	$450,000
SBA Guarantee (75% of loan)	$337,500
Upfront Guarantee Fee (3.0% of guaranteed portion)	$10,125
Annual Servicing Fee (0.55% of guaranteed balance, est. total)	$9,490
Total Financed (loan + upfront fee)	$460,125
Net Loan Proceeds	$439,875

SBA vs. Conventional Loan Comparison

	SBA 7(a) Loan	Conventional
Interest Rate	8.5%	13.5%
Monthly Payment	$5,705	$6,852
Total Interest	$224,462	$372,281
Total Cost	$744,077	$872,281
Monthly Savings	$1,147/mo with SBA
Funding Speed	30-90 days	1-7 days (online)

Conventional rate estimated at 13.5% for comparison purposes. Actual rates vary by lender and borrower profile.

SBA Loan Requirements Overview

Factor	Typical Minimum	Preferred
Credit Score	650	680+
Time in Business	2 years	3+ years
Annual Revenue	$100,000	$250,000+
DSCR	1.15	1.25+
Down Payment	10%	20%+
Collateral	Helps, not required	Real estate or equipment

For-profit US business

Not in a prohibited industry

Owner has invested equity

An SBA loan could save you $128,204 over a conventional loan.

Need funds faster? We also offer conventional term loans that fund in days. No impact to your credit score.

See Your Options Check Your DSCR First

How SBA Loans Work

SBA loans are partially guaranteed by the U.S. Small Business Administration, which reduces risk for lenders and results in lower rates and longer terms for borrowers. The SBA does not lend directly. Instead, it guarantees a portion of the loan made by an approved bank or lender. That guarantee costs the borrower fees, but those fees are small compared to the interest savings over the life of the loan. This calculator factors in all SBA-specific fees so you see the true cost, not just the payment.

SBA 7(a) vs 504: Which Program Fits?

The 7(a) program is the SBA's most flexible option. Use it for working capital, equipment, real estate, acquisitions, or refinancing existing debt. Loans go up to $5 million with terms up to 25 years for real estate and 10 years for most other purposes. The 504 program is specifically for fixed assets: commercial real estate or major equipment purchases. It uses a three-party structure where you put 10% down, a bank covers 50%, and an SBA-backed CDC covers 40% at a below-market fixed rate. The 504 often delivers lower total cost for qualifying projects but cannot be used for working capital. Compare both programs side by side with this calculator, then use our standard loan calculator to model conventional alternatives.

Understanding SBA Guarantee Fees

The SBA charges two types of fees on 7(a) loans. The upfront guarantee fee is a percentage of the guaranteed portion of the loan, ranging from 2.0% for loans up to $150,000 to 3.75% for loans over $1 million. This fee is typically financed into the loan so you do not pay it out of pocket. The annual servicing fee is 0.55% of the outstanding guaranteed balance, included in your monthly payment by the lender. On a $500,000 loan, the upfront fee might be around $11,250 and the servicing fee adds roughly $100 per month in the early years. Even with these fees, total cost is usually significantly lower than a conventional business term loan because the interest rate itself is lower.

Getting Approved for an SBA Loan

SBA lenders typically look for a personal credit score of 680 or higher, at least 2 years in business, and a debt service coverage ratio (DSCR) of 1.15 or better. Check your DSCR before applying to see where you stand. Collateral helps but is not always required for 7(a) loans. The process takes 30 to 90 days, longer for 504 loans because of the CDC approval layer. If you need funds faster, conventional lines of credit and term loans can fund in days. Use our loan comparison tool to weigh the rate savings against the timeline. Talk to a funding specialist to find out which SBA program fits your situation, with no impact to your credit score.

How It Works

Choose Your SBA Program

Select 7(a) or 504, then enter your total project cost, interest rate, loan term, and down payment percentage.

Review Your Estimate

See your monthly payment, total interest, SBA guarantee fees, and net proceeds. For 504 loans, the bank and CDC portions are broken out separately.

Compare to Conventional

View a side-by-side comparison showing how much you could save with SBA financing versus a conventional business loan at market rates.

What You Get

Program-Specific Calculations

Toggle between SBA 7(a) and 504 to see how each program structures your loan, fees, and payments differently.

Guarantee Fee Breakdown

For 7(a): the upfront guarantee fee (2.0% to 3.75%) and annual servicing fee (0.55%), both calculated on the guaranteed portion.

504 Structure Detail

See the three-party split: your down payment, the bank portion (50%), and the CDC/SBA portion (40%) with its lower fixed rate.

Total Cost Summary

Monthly payment, total interest, all fees, and down payment combined into one total cost figure.

SBA vs Conventional Comparison

Side-by-side table comparing rate, monthly payment, total interest, total cost, and estimated savings.

Qualification Overview

Quick reference for typical SBA requirements: credit score, time in business, revenue, DSCR, down payment, and collateral.

SBA Loan Payment Calculator: Frequently Asked Questions

SBA 7(a) is the most flexible program: up to $5 million for almost any business purpose, with terms up to 10 years (25 for real estate). SBA 504 is specifically for fixed assets like commercial real estate or major equipment, with up to $5.5 million and terms of 10 to 25 years. The 504 structure splits the financing: a bank covers about 50%, the SBA-backed CDC covers 40%, and you put 10% down. The 504 often has lower rates on the CDC portion but is less flexible in how the funds can be used.

SBA guarantee fees are based on the guaranteed portion of the loan, not the full loan amount. For 7(a) loans up to $150,000, the SBA guarantees 85% and the fee is 2.0% of that guaranteed portion. For loans above $150,000, the guarantee drops to 75% and the fee ranges from 3.0% to 3.75% depending on loan size. There is also an annual servicing fee of 0.55% on the outstanding guaranteed balance. These fees are typically financed into the loan or paid at closing. This calculator includes all fees in the total cost.

Most SBA lenders look for a personal credit score of 680 or higher, though some will work with scores as low as 650. A score of 720+ puts you in the strongest position for approval and the best rates. Credit score is only one factor. Lenders also evaluate time in business (2+ years preferred), annual revenue, debt service coverage ratio, and collateral. Use our DSCR calculator to check your debt capacity before applying.

SBA loan processing typically takes 30 to 90 days from application to funding. SBA 7(a) loans through preferred lenders can sometimes close in 2 to 3 weeks. SBA 504 loans take longer, often 60 to 90 days, because they involve both a bank and a Certified Development Company (CDC). If you need funds faster, a conventional business term loan can often fund in 1 to 7 days with slightly higher rates. Talk to a funding specialist to explore your timeline options.

Yes, SBA loans generally offer lower rates than conventional business loans because the government guarantee reduces lender risk. SBA 7(a) rates are typically tied to the Prime Rate plus a spread of 2.25% to 2.75%, putting current rates roughly in the 7% to 10% range. SBA 504 CDC debenture rates are often even lower. By comparison, conventional term loans from online lenders typically range from 10% to 25%. The tradeoff is that SBA loans require more documentation and take longer to close. Use this calculator to compare the payment difference.

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