A loan backed by the Small Business Administration (SBA) typically offers small businesses lower interest rates and longer terms than other financing options. Our SBA calculator will help you see just how affordable your SBA loan can be.
How the SBA Loan Calculator Works
Our SBA loan calculator is designed for SBA 7(a) and SBA Express Loans. You input the loan term, desired loan amount, expected interest rate, and annual net operating income. The calculator will then generate your monthly payment and a projected amortization schedule.
Note: Please do not use this calculator for calculating interest rates or payments on Certified Development Company (CDC)/SBA 504 loans. The SBA 504 loan consists of two separate loans, and our calculator is not set up to accurately calculate this loan product. If you need to calculate payments for an SBA 504 loan, many community development corporations can provide those calculations for you.
SBA Loan Payment Calculator Inputs
The more accurate the information you put into the calculator, the more accurate the results will be. There are three essential pieces of information you will need to enter into the calculator:
- Loan amount: In this field, enter the amount of the loan that you are applying for in whole dollars.
- Term (in years): This is the estimated repayment term of the loan for which you are applying. Loan terms are generally up to 10 years for working capital and up to 25 years for real estate. The longer the repayment term is for your loan, the lower the monthly payments will be.
- Expected interest rate: The calculator will only accept interest rates up to the maximum SBA loan interest rate. The interest rate on your loan impacts your payment amount; higher interest rates yield higher payments.
How to Read Your SBA Loan Calculator Results
- Loan amount: The first and most important input into the calculator is the loan amount for which you are applying. This should be as accurate as possible. SBA Express loans are available up to $350,000 and 7(a) loans in amounts up to $5 million.
- Monthly payment: The primary output of the SBA loan calculator is the monthly payment. It is important to review this number to ensure that you can afford the amount and that you feel comfortable with a payment of this size. The monthly payment is impacted by the interest rate on the loan as well as the loan amount and length of the term.
- Amortization schedule: The SBA loan calculator generates an estimated amortization schedule based on the information entered. The amortization schedule breaks down each monthly payment into principal and interest over the course of the loan. This allows you to see how interest rates and terms affect your payments.
Once you have reviewed the results of the SBA loan calculator, you can use this information to help you decide whether or not you want to apply for an SBA loan. One of our preferred SBA loan providers is SmartBiz. SmartBiz can prequalify you through a simple online application that takes only a few minutes to complete.
What’s Not Included in the SBA Loan Payment Calculator
Our SBA loan calculator is a great tool for estimating your monthly SBA 7(a) or Express loan payment. However, it is not an all-inclusive calculator. Our calculator does not take into account the fees associated with SBA loans. These include fees for lender origination, SBA loan guarantee, loan packaging, and closing costs. Some fees can be rolled into your total loan amount while others may require that you pay them upfront.
Additionally, our SBA loan calculator does not provide information to help you determine if you meet the qualification requirements for the SBA 7(a) or SBA Express loan programs. Prior to applying for an SBA loan, you should review the qualification requirements to ensure your business is eligible to receive SBA loan funds.
We have briefly discussed the various inputs and outputs of the SBA loan calculator, how it works, and the concerns that the calculator does not address. With those basics established, we can delve deeper into how each of these facets plays a part in the calculations.
SBA Loan Payment Factors
The primary inputs in our SBA loan calculator are the loan amount, repayment term, and interest rate. These items affect the total cost of the loan and the monthly payment. It’s important to understand how much an SBA loan is going to cost each month and over the life of the loan before you make a financing decision.
SBA loan costs and monthly loan payments are typically affected by loan amount and loan term, SBA loan interest rates, and SBA loan fees.
1. Loan Amount & Term
In general, interest rates are lower for larger loan amounts and shorter repayment periods. SBA loans have a maximum loan amount of $5 million and maximum repayment terms of 10 years for working capital and 25 years for real estate.
2. SBA Loan Interest Rates
The government sets maximum SBA interest rates that lenders can charge on SBA 7(a) loans. The maximum interest rates are determined by the length of the loan term and the size of the loan amount being borrowed.
The interest rate on 7(a) loans can be fixed or variable. With a variable rate, the interest rate you are charged changes with market interest rates. If market rates rise, the loan’s interest rate and payments will also rise. This change in interest rate is typically gradual, occurring over the course of several years.
Keep in mind that the interest rate is different from the annual percentage rate (APR) of the loan. Additional borrower costs that are rolled into the loan, such as the SBA guarantee fee, packaging fee, and closing costs, will increase the APR.
3. SBA Loan Fees
The largest SBA loan fee is usually the guarantee fee. Initially paid by the lender, the fee is almost always passed on to the borrower at closing and typically is rolled into the whole loan.
The amount you’re charged as a guarantee fee is based on the size and term of your loan. You’re generally charged a 2% fee on loans up to $150,000, a 3% fee on loans between $150,000 and $700,000, 3.5% on loans of more than $700,000, and an additional 0.25% on any amounts higher than $1 million.
Bottom Line
In most cases, SBA loans offer the most affordable financing for small business owners. The SBA business loan calculator will help you estimate the monthly payment for an SBA 7(a) loan for either working capital or commercial real estate and provide you with an amortization schedule for your loan.
If you want to apply for an SBA loan after using the SBA loan calculator, SmartBiz can prequalify you in minutes with only a soft credit pull. With its streamlined application process, SmartBiz can often provide SBA loan funding in as quickly as 30 days.
