Monthly payment on an SBA 7(a) loan at the SBA maximum rate for its size (prime + 3% to 6.5%) or your quote, with the guaranty share and the FY 2027 upfront fee
Updated October 2026
An SBA 7(a) loan is made by a bank or other lender, and the Small Business Administration guarantees part of it. The lender sets the rate, but SBA caps it. For a variable-rate loan the cap is a base rate, usually the prime rate, plus a spread that shrinks as the loan gets bigger. The payment is an ordinary amortizing loan payment: P × i ÷ (1 − (1 + i)−n), where i is the monthly rate and n the number of months.
Worked example. The Federal Reserve’s H.15 release shows the bank prime rate at 7.00% in mid-October 2026. A $200,000 loan falls in the $50,001 to $250,000 tier, so the most a lender can charge on a variable rate is 7.00% + 6.0% = 13.00%. Over 10 years (120 months) at 13.00%, the payment is $2,986.21 a month. That is $358,345 in total and $158,345 in interest. SBA guarantees 75% of a loan above $150,000, or $150,000 here. The FY 2027 upfront guaranty fee is 3% of that guaranteed portion: $4,500.
| Loan amount | Maximum variable rate | SBA guaranty | Upfront fee, over 12 months (FY 2027) |
|---|---|---|---|
| $50,000 or less | Base + 6.5% | 85% | 2% of guaranteed portion |
| $50,001 to $150,000 | Base + 6.0% | 85% | 2% of guaranteed portion |
| $150,001 to $250,000 | Base + 6.0% | 75% | 3% |
| $250,001 to $350,000 | Base + 4.5% | 75% | 3% |
| $350,001 to $700,000 | Base + 3.0% | 75% | 3% |
| $700,001 to $5,000,000 | Base + 3.0% | 75% | 3.5% of the guaranteed portion up to $1 million, 3.75% above |
| Loan | Max rate | Monthly payment | Guaranteed portion | Upfront fee | Total interest |
|---|---|---|---|---|---|
| $40,000, 7 years | 13.50% | $738.60 | $34,000 | $680 | $22,042 |
| $100,000 working capital, 10 years | 13.00% | $1,493.11 | $85,000 | $1,700 | $79,173 |
| $200,000, 10 years (default) | 13.00% | $2,986.21 | $150,000 | $4,500 | $158,345 |
| $300,000 equipment, 10 years | 11.50% | $4,217.86 | $225,000 | $6,750 | $206,143 |
| $500,000 equipment, 10 years | 10.00% | $6,607.54 | $375,000 | $11,250 | $292,905 |
| $500,000 for a manufacturer, 10 years | 10.00% | $6,607.54 | $375,000 | $0 | $292,905 |
| $2,000,000 real estate, 25 years | 10.00% | $18,174.01 | $1,500,000 | $53,750 | $3,452,203 |
| $250,000 short-term, 12 months | 13.00% | $22,329.32 | $187,500 | $469 | $17,952 |
The rate cap falls in steps as loans grow, from prime + 6.5% to prime + 3.0%, so a $300,000 loan can carry a lower maximum rate than a $200,000 one. The $2 million real estate loan’s fee is 3.5% of the first $1 million guaranteed plus 3.75% of the remaining $500,000 guaranteed, $53,750. Lenders often charge less than the maximum, and a lower quoted rate goes in the “your quoted rate” box.
The SBA guaranty lowers the lender’s risk on the guaranteed share. SBA also allows terms up to 25 years for real estate, which lowers the monthly payment compared with a shorter loan. The trade-offs are the upfront guaranty fee, rate caps tied to a floating base rate, and SBA’s eligibility rules. Compare the total cost, fee included, with any conventional offer over the same term.
It models a standard 7(a) term loan with level monthly payments and the FY 2027 fee notice. It does not model:
Eligibility depends on size standards, use of proceeds, credit and the lender’s own rules. A lender, an SBA district office or a free SBA resource partner such as SCORE or a Small Business Development Center can review a specific deal.