COST

The cost and repayment of your SBA loan will be dependent on the program you choose. Below are a few financial figures associated with each of SBA’s most popular loan programs.

7(a) Loan Program

Fees: A guaranty fee, based on the loan’s maturity and the dollar amount guaranteed (versus the total loan amount) might be included in the total cost of the loan. The lender originally pays the guaranty fee but has the option to pass that expense on to the borrower. The fees range from 0% (for loans under $150,000) to 3.5% on loans of more than $700,000. There is also an additional fee of 0.25% on any guaranteed portion of more than $1 million.

Interest: Both fixed and variable interest rate structures are available. The maximum rate is composed of two parts, a base rate and an allowable spread. Lenders are allowed to add an additional spread to the base rate to calculate the final rate. For loans with maturities of shorter than 7 years, the maximum spread will be no more than 2.25%. For greater maturities, the maximum spread increases to 2.75%.

Repayment: Monthly payments for 25 years for real estate, 10 years for equipment, and generally up to 7 years for working capital.