Question 1

How do you calculate an SBA loan payment?

Accepted Answer

SBA 7(a) loans use standard amortization. Monthly payment = P[r(1+r)^n]/[(1+r)^n-1], where P is loan amount, r is monthly interest rate, and n is the number of monthly payments. This calculator does the math for you, including the SBA guarantee fee.

Question 2

What are current SBA loan rates?

Accepted Answer

SBA 7(a) loan rates are based on the prime rate plus a spread. For loans over $50,000 with variable rates, the maximum is prime + 2.25% to prime + 2.75% depending on maturity. Check the SBA website for the latest prime rate.

Question 3

What is the SBA guarantee fee?

Accepted Answer

The SBA charges a guarantee fee based on loan amount and maturity. For loans over $1 million with maturities over 12 months, the fee is 3.5% of the guaranteed portion, plus an additional 0.25% on amounts over $1 million. Smaller loans have lower fees.

Question 4

How long are SBA loan terms?

Accepted Answer

Working capital and inventory loans: up to 10 years. Equipment loans: up to 10-25 years based on useful life. Real estate loans: up to 25 years. Longer terms mean lower monthly payments but more total interest paid.

Question 5

What is an amortization schedule?

Accepted Answer

An amortization schedule is a month-by-month table showing how each loan payment splits between principal and interest, along with the remaining balance after each payment. Early in the loan, most of each payment goes toward interest. Over time, the interest portion shrinks and more goes to principal. This calculator generates a full schedule you can expand, review by year, and download as a CSV file.

Question 6

How can I reduce the total interest on my SBA loan?

Accepted Answer

Three ways to reduce total interest: (1) Make extra principal payments when cash flow allows. (2) Refinance if rates drop below your current rate. (3) Choose a shorter loan term if your business can handle the higher monthly payments. Use the amortization schedule to compare how different terms affect your total interest paid.

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