How to use it
- Choose the SBA program you're considering. The term options and loan limit update to match.
- Enter the loan amount. The rate defaults to the SBA cap for that size, and you can override it with your lender's quote.
- Leave the guarantee fee on to see the true net proceeds and APR, and add any packaging or closing fees.
The SBA programs side by side
| Program | Max | Max term | Best for |
|---|---|---|---|
| 7(a) Standard | $5M | 10 yrs (25 real estate) | Most purposes: working capital, acquisitions, equipment, property |
| 7(a) Small | $350k | same as 7(a) | Smaller 7(a) loans with simpler paperwork |
| SBA Express | $500k | 10 yrs (25 real estate) | Faster decisions, lines of credit |
| 504 | $5M+ (CDC portion) | 10, 20 or 25 yrs | Owner-occupied real estate and major equipment at a fixed rate |
| Microloan | $50k | 6 yrs | Startups and very small businesses |
How 7(a) rate caps work
Lenders price 7(a) loans as a spread over the Prime rate, and SBA limits the spread by loan size:
| Loan amount | Max variable rate |
|---|---|
| $50,000 or less | Prime + 6.5% |
| $50,001 – $250,000 | Prime + 6.0% |
| $250,001 – $350,000 | Prime + 4.5% |
| Over $350,000 | Prime + 3.0% |
Fixed-rate caps are a little higher. Variable-rate loans reset when Prime moves, so the payment can change.
The guarantee fee
SBA guarantees 85% of 7(a) loans up to $150,000 and 75% above that (50% for Express). The upfront fee is a percentage of that guaranteed part, and it steps up with loan size. On a $500,000 loan, 75% is guaranteed ($375,000), and a 3% fee on that is $11,250.
What lenders will ask for
- Two to three years of business and personal tax returns
- A year-to-date P&L and balance sheet
- A debt schedule, a business plan or use-of-funds statement, and projections for newer businesses
- SBA Form 1919 and personal financial statements (Form 413) for each 20%+ owner
If SBA isn't the right fit
Compare against a conventional bank loan, equipment financing or a line of credit using the business loan calculator. Conventional loans can be faster, and there is no guarantee fee if your credit and collateral are strong.