If you’re considering applying for an SBA loan, it’s important to understand what your potential loan payments may look like. Our SBA loan payment calculator can help you determine these payments and provide you with a full amortization schedule to show the breakdown of principal and interest payments.
SBA 7(a) Loan Calculator Inputs
The inputs needed for our SBA 7(a) loan calculator include the loan amount, interest rate, and annual business income. These factors are crucial in determining your debt service coverage ratio (DSCR), which lenders often use to assess loan eligibility.
Loan Amount: The maximum loan amount for SBA 7(a) loans is typically $5 million, with variations depending on the type of 7(a) loan you apply for. For example, small and express loans have lower maximum amounts.
Repayment Term: SBA 7(a) loans have different repayment terms based on the purpose of the loan, with maximum terms of 10 years for equipment, inventory, or working capital, and 25 years for real estate.
Interest Rate: SBA 7(a) loan interest rates are subject to maximums set by the SBA, which can fluctuate based on benchmark rate indexes. Individual lenders may offer competitive rates within these limits.
Annual Business Income: Your company’s net operating income is used to calculate your DSCR, which measures your ability to repay debts based on income. A DSCR of 1.25x or greater is typically required for loan approval.
SBA 7(a) Loan Calculator Outputs
Once you input the necessary values, the calculator will generate outputs including your monthly payment, DSCR, and an amortization table.
Monthly Payment: This figure represents the amount you’ll need to pay each month, comprising principal and interest. Timely payments are crucial to maintain a good business credit score.
DSCR: The Debt Service Coverage Ratio indicates your company’s ability to repay debts based on income. A ratio of 1.25x or higher is usually required for loan approval.
Amortization Table: This table shows how your loan balance decreases with each payment, illustrating the allocation of payments towards principal and interest over time.
Other SBA Loan Fees
In addition to monthly payments, there are other fees associated with SBA loans that you should be aware of:
- SBA Guarantee Fee: Ranging from 0% to 3.75%, this fee covers potential losses for lenders in case of defaults.
- Packaging Fee: Typically between $2,000 to $4,000, covering lender costs for documentation.
- Extraordinary Servicing Fee: Up to 2% or more for complex loans requiring additional due diligence.
- Other Third-Party Fees: Fees from title companies, appraisers, or law firms.
- Prepayment Penalty: A penalty for early repayment, applicable for loans with terms longer than 15 years.
Other SBA Loan Programs
Apart from the 7(a) loan program, the SBA offers other financing options such as the 504 loan program for acquiring assets and disaster loans for businesses affected by natural disasters.
Bottom Line
If you’re considering an SBA loan, our calculator can help you estimate your payments and understand the terms of your loan. Make sure to review all fees and terms associated with the loan program to ensure it aligns with your business needs.