How this calculator works
An SBA 7(a) loan has two costs most quick calculators miss: the guarantee fee the SBA charges upfront, and the way term length trades a lower monthly payment for far more total interest. This tool handles both. It amortises the loan to find your monthly principal-and-interest payment, computes the FY2026 guarantee fee on the guaranteed portion, and — because 7(a) loans are underwritten on cash flow — lets you check the debt-service coverage ratio lenders care about most.
The guarantee fee is charged only on the portion the SBA guarantees, not the whole loan: 85% for loans up to $150,000 and 75% for larger loans. The fee is then tiered by loan size. Because it's a real cash cost at closing, most borrowers finance it into the loan, which this calculator does by default — slightly raising the payment in exchange for keeping cash in the deal.
The numbers behind it
The monthly payment is standard amortization, where L is the financed amount, i the monthly rate, and n the term in months:
The FY2026 guarantee fee, on the guaranteed portion, is 2% up to $150,000; 3% from $150,001 to $700,000; and 3.5% of the first $1,000,000 guaranteed plus 3.75% above that, from $700,001 to $5,000,000. Coverage is:
- Guarantee fee: $375,000 guaranteed (75%) × the fee rate =
$11,250, added to the loan. - Monthly payment: on $511,250 financed ≈
$6,899/month. - Total interest: roughly
$317,000over the term. - DSCR at $120,000 cash flow: ≈
1.45— lenders want at least 1.25.
Acronyms used on this page
- DSCR
- Debt-Service Coverage Ratio
- SDE
- Seller’s Discretionary Earnings
- EMI
- Equated Monthly Installment
- SBA
- U.S. Small Business Administration
- NAICS
- North American Industry Classification System
Current rates and what affects them
With the prime rate at 6.75% in mid-2026, 7(a) variable rates generally run from about 9.5% to 11.5%. The SBA caps the spread a lender may add over the base rate, and the cap depends on loan size and term, so well-qualified borrowers often price below it. Because the spread difference between lenders can be over a percentage point — tens of thousands of dollars on a large loan over its life — getting several quotes is the highest-value step in the process. Rates here are estimates; your actual rate depends on credit, collateral, and the lender.
Frequently asked questions
What is the SBA guarantee fee?
A one-time upfront fee on the guaranteed portion of a 7(a) loan. FY2026 term-loan rates: 2% up to $150k, 3% for $150,001–$700k, and 3.5% of the first $1M guaranteed plus 3.75% above, for $700,001–$5M. Often financed into the loan.
What are current SBA 7(a) rates?
With prime at 6.75% (mid-2026), variable rates typically run ~9.5–11.5%, depending on loan size, term, and credit. The SBA caps the lender's spread; strong borrowers often price below the cap.
How long are 7(a) terms?
Up to 10 years for working capital, equipment, and acquisition (goodwill); up to 25 years when secured by real estate. Longer terms cut the payment but raise total interest.
Is the guarantee fee ever waived?
For FY2026 the SBA waived the upfront fee on 7(a) loans of $950,000 or less to manufacturers (NAICS 31–33). Most other borrowers pay the standard schedule. Always confirm current fees with your lender.