SBA Loan Calculator: Estimate Your Term Loan Costs

The SBA Business Loan Calculator helps you estimate the costs of your SBA term loan by calculating monthly payments, total interest, and overall loan repayment.

Simply input your loan amount, interest rate, and term length to get a clear picture of what your SBA loan will cost over time. This tool helps you make informed decisions about your business financing.

If you're looking to obtain affordable business financing, then SBA-backed loans will be excellent because the interest rates are low, and the repayment period long, but do know that what you borrow may affect the total cost of the loan over time.

You can use our SBA Business Loan Calculator to estimate your loan's cost. Get started using the calculator above. The following guide is going to explain how you can use the calculator to estimate your SBA loan's cost, as well as what determines your cost.

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How to Use Our SBA Loan Calculator

Our SBA loan calculator will give you an estimate of the costs that come with all kinds of SBA loans. The following is how to use our calculator effectively:

Before You Calculate

To get started you will need three important things:

• Principal Loan Amount – how much you are going to borrow
• Interest Rate – the interest rate on your loan
• Term Length – the amount of time you have to pay back the loan in either months or years.

If you don't have precise numbers, that's okay. The calculator will give you an estimate, but you'll want an official loan offer from a lender for the precise loan costs.

Once you put in your information, be sure to check if the term length is in months or years, then click the "Calculate" button to see your results.

Using Your Results

Here's what the calculator will show you:

Estimated Monthly Payment It would help you assess whether it would be affordable. Compare it to your monthly cash flow to figure out if it would be able to stay in your budget. When you feel the payment will be too high, perhaps look for a smaller loan or a lower interest rate.

Total Payback Amount: This is the total that you will pay back on the loan over its life, with both principal and interest payments. The higher the interest rate, the more you will be paying over time.

Amortization Schedule: This schedule shows each monthly payment as a breakdown of how much is going toward interest and how much is going toward the principal. It also shows the balance remaining and total interest paid at the end of each month.

Use these results to make a more informed decision about whether the loan is right for your business's financial situation.

Calculator Limitations

Although our SBA loan calculator is a useful tool, it does have a couple of limitations to keep in mind.

First, the business loan fees are not factored into the calculator. These fees can add hundreds of dollars to your loan. SBA loans usually have some fees: an SBA loan guarantee fee, packing fees, and sometimes referral fees, which are all percentages of your loan amount.

For example, a 2% loan guarantee fee on a $500,000 loan adds $10,000 to your total loan cost. Make sure to factor these fees into your calculations when estimating your loan costs.

The calculator only gives an estimate of your loan costs. Always ask your lender for exact figures, including your monthly payment and total payback amount, before accepting a loan offer.

Factors Affecting SBA Loan Costs

Loan Amount

The more you borrow, the higher your total repayment will be. Larger loan amounts result in higher interest and fee payments because many costs are percentage-based.

For example, 5% of $10,000 is $500, while 5% of $50,000 is $2,500. Borrow the amount you need, but keep in mind that a larger loan will cost more in the long run.

Interest Rate

Higher interest rates will translate to higher costs in the long run. Fortunately, SBA loans are known to have competitive rates. The SBA sets specific interest ranges based on factors such as the US Prime Rate, length of the loan term, and loan amount.

Your personal credit score might also determine your rate, but with SBA guidelines, you are assured of getting a fair rate.

Loan Term

Your loan term-how long you need to repay the loan is determined by the type of SBA loan you have. For example, SBA Express loans tend to range from 5 to 25 years, and SBA 504 loans from 10 to 20 years.

Your loan term will impact how much interest you pay but it also impacts your overall loan cost. The longer you stretch out your loan, the longer you will pay interest. Comparing a $100,000 loan at 5%, the interest paid on one year would be $2,728.97 compared to $13,227.34 for five years.

However, the longer terms decrease the monthly installments too. The same $100,000 loan, for instance, would call for a month installment of $8,560.75 in one year period and a mere $1,887.13 in a five-year term period.

Based on the company's degree of flexibility, you pick the right term in accordance to the affordability each month you can make to pay towards your loan.

You should not count on early payoffs to save money either, as SBA loans usually have prepayment penalties. These are paid if you pay off the loan before the agreed date, which may reduce or even eliminate any savings when paying off the loan earlier than scheduled. Be sure to check the terms of your loan to understand the potential prepayment penalties when making extra payments.

Fees

The last factor that will determine your SBA loan cost is the fees for the loan. SBA loans can have several fees attached to them, such as:

• Packaging fees
• SBA guarantee fees
• Referral fees
• Other bank closing costs

These fees are often calculated as a percentage of your loan principal. The SBA sets acceptable ranges for these fees depending on the type of loan you’re taking out, so be sure to ask your lender about the specific fees that may apply to your loan.