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SBA 7(a) vs SBA 504 Business Loan Calculator

Compare SBA 7(a) working capital loans against SBA 504 commercial real estate loans, analyzing down payments, interest rate structures, and monthly payments.

Calculation Results

SBA 504 Blended Monthly Payment: $9,412 / mo Blended Rate: ~6.85% (Fixed 25-yr)
SBA 7(a) Monthly Payment: $13,018 / mo Floating Rate: 10.75%
Monthly Cash Flow Savings (504 vs 7a): $3,606 / mo
Borrower Equity Down Payment (10%): $150,000

About This Calculator

Compare SBA 7(a) working capital loans against SBA 504 commercial real estate loans, analyzing down payments, interest rate structures, and monthly payments.

Frequently Asked Questions

What is the key difference between an SBA 7(a) and SBA 504 loan?

The SBA 7(a) is an all-purpose loan for working capital, business acquisition, debt refinancing, and equipment with variable interest rates. The SBA 504 loan is specifically for owner-occupied commercial real estate and heavy machinery, offering below-market fixed rates.

How is an SBA 504 loan structured?

An SBA 504 loan has a 50-40-10 structure: 50% financed by a senior private commercial bank, 40% financed through an SBA Certified Development Company (CDC) backed by a 20- or 25-year fixed debenture, and 10% contributed as borrower equity down payment.

What are the maximum borrowing limits for SBA loans?

The maximum SBA 7(a) loan amount is $5,000,000. Under the SBA 504 program, the CDC portion can be up to $5,000,000 (or $5,500,000 for energy-efficient or small manufacturing projects), meaning total project costs can exceed $12 to $15 million.

Do SBA loans have prepayment penalties?

SBA 7(a) loans with terms of 15 years or longer have a 3-year prepayment penalty (5% in year 1, 3% in year 2, 1% in year 3). SBA 504 loans feature a declining 10-year prepayment penalty on the CDC debenture portion.