SBA Loan Calculator
Small Business Administration (SBA) loans are popular, low-cost resources for many businesses. Between 7(a) and SBA Express loans, CDC/504 loans, Microloans, and Disaster Loans, the SBA offers loan programs that are beneficial for most businesses.
Have you been offered an SBA loan? You can use this calculator to estimate everything you need to know to make an informed borrowing decision.
What Is An SBA Loan?
The Small Business Administration is a government agency dedicated to helping small businesses and strengthen the economy. Among other services, the SBA does this by offering multiple loan programs.
- The most popular program is the 7(a) Loan Program, which includes many types of loans that can be used for most general business purposes. Of particular note is the SBA Express Program—general-use 7(a) loans with an expedited application process.
- While you can finance fixed assets with a 7(a) loan, business owners interested in financing real estate, machinery, or other high-cost fixed assets might be interested in the CDC/504 Loan Program. Borrowers benefit from low-interest, fixed rate loans with long term lengths.
- If your business would benefit from a small amount of cash, the SBA works with intermediaries to offer Microloans. These loans have borrowing amounts less than $50,000 and carry reasonable interest rates.
- If your business or home has been affected by a disaster, you might be eligible for a Disaster Loan. The SBA makes loans to businesses if they have been physically or economically damaged in a federally declared disaster area.
This loan calculator will work for all SBA loans. For more information on the SBA’s programs, check out our article on the subject: SBA Loans Explained.
Fixed vs. Variable Interest Rates
If your loan has a fixed interest rate, your rate will stay the same for the life of the loan. On the other hand, if your loan has a variable interest rate, your rate will rise or fall in accordance with market forces.
Most SBA loans, including 504 loans, microloans, disaster loans, and some 7(a) loans, have fixed interest rates. The rate you are offered will stay the same until you have repaid your loan.
However, SBA 7(a) and Express Loan rates typically have variable interest rates. Your rate is calculated via a base rate plus a markup; when the base rate changes, so will your interest rate.
Lenders can use one of three base rates to calculate your interest rate:
- Prime Rate: The lowest rate banks set for lending. The most commonly used prime rate is published by the WSJ.
- One Month LIBOR + 3% Rate Adjustment: The London Inter-bank Offered Rate, a rate used for inter-bank lending in London.
- SBA Optional Peg Rate: A metric which the SBA defines as “a weighted average of rates the federal government pays for loans with maturities similar to the average SBA loan.”
If you have a variable interest rate, be aware that this calculator will only give you a rough estimate of the cost of your loan. The true cost will rise or fall depending on your interest rate. Head over to our SBA Loan Rates article for more information, as well as current rates for 7(a) and CDC/504 loans.
How To Use The SBA Loan Calculator
This calculator is designed to give you all the information you need to fully understand the cost of your loan. Confused about what everything means? Here’s a rundown of all the inputs and outputs.
- Loan Amount: The amount you are borrowing. This number is expressed as a dollar amount.
- Interest Rate: Your interest rate. This number is expressed as a percentage.
- Origination Fee: Any fee, expressed as a percentage, that is deducted from the loan amount before you receive the funds. While these fees are commonly called origination fees, some lenders might call them something else, such as a processing fee, referral fee, or others. If it’s a percentage, it can go in this input.
- Closing Costs: Any fee, expressed as a dollar value, that is deducted from the loan amount before you receive the funds. While all SBA loans will carry some sort of fees, they might not all have closing costs.
- Number Of Payments: The number of payments you will have to make to pay off your loan. Because 10 years is a common term length for SBA loans, most loans will have 120 payments.
- Total Repayment: The estimated total amount you will have to repay, including the original borrowing amount, fees, and interest charges.
- Financing Cost: The estimated total amount you will have to repay in fees, including interest charges and other fees.
- Payment Per Month: The estimated amount you will have to pay every month. This is a fixed number, but might go up or down if your interest rate changes.
- APR: The estimated annual percentage rate (APR), which includes the interest and any other fees charged during the lending process.
- Cents On The Dollar: The amount you’re paying in fees and interest charges per dollar borrowed. For example, if your cents in the dollar cost is 0.21, you are paying $0.21 in fees and interest charges for every $1.00 borrowed.