Calculator
SBA 7(a) versus conventional total cost
The guaranteed path usually costs more in fees and less per month, because the term is longer and the injection is smaller. Set the amount and the term for each structure and read the two totals against each other.
Direct answer
Practition Finance publishes this model so a buyer can compare 2 paths on identical amounts, a guaranteed structure against a conventional practice note. It shows the payment under each, the guaranty fee and injection the guaranteed path adds, and the total cost across the full term of both.
As of October 2026
Run your numbers
Model the payment
Move the amount, the term, and the rate to see what the note costs per month and across its life
SBA 7(a) commonly amortizes over 10 years, real estate over 25
Move this to the range your bank or the market is quoting
Monthly payment
$13,215
120 months at 10%, principal and interest
Interest across the term
$585,809
Before any origination, packaging, or guarantee fee the structure carries
Total repaid
$1,585,809
Principal plus interest, if the note runs to maturity with no prepayment
Educational arithmetic on the numbers you entered. It is not a quote, a promise to lend, or an indication of offers to come, and no funder has priced this file. Program availability varies by state.
| Assumption | What the model uses | Why it is set that way |
|---|---|---|
| Same financed amount | Both structures priced on one number | A comparison only holds when the amount is identical, so injection differences are treated separately rather than netted in. |
| Guaranty fee | Applied to the guaranteed portion | The fee is set by program schedule and by loan size, and it can be financed, which changes the payment as well as the total. |
| Term | Longer on the guaranteed path | A longer amortization lowers the monthly figure and raises the interest paid, which is the trade the comparison exists to show. |
| Injection | Stated, not financed | The cash a buyer brings differs between the two paths and belongs beside the total, not inside the payment. |
| Rate basis | Fixed nominal rate on both sides | Guaranteed loans commonly price over prime and adjust, so a fixed comparison isolates the structural difference. |
| Prepayment | Excluded from the totals | The guaranteed path carries a declining prepayment charge on longer terms, which matters only if the note is retired early. |
Educational arithmetic on the numbers entered. It is not a quote, a promise to lend, or // copy-allow an indication of offers to come, and program availability varies by state.
How to read what it gives you
Compare monthly cash first
The guaranteed structure usually wins on monthly cash because the amortization is longer. If the practice is tight in the first 24 months, that difference is the whole decision, and the fee premium is the price of the cushion.
Then compare the total
Add the guaranty fee to the interest paid across the full term. The conventional path frequently costs less in total and demands more cash at closing and more coverage each month. Read both numbers before choosing.
Price the injection separately
A smaller injection leaves cash in the practice for payroll and supplies. That cash has value that never appears in an interest total, so compare the closing cash requirement as its own line.
Check the prepayment window
If the plan is to refinance or sell within a few years, the declining prepayment charge on a long guaranteed term changes the ranking. Model the exit you actually expect rather than the full term.
When the number means it is time to talk to someone
- The purchase includes real estate, which opens a different guaranteed structure with its own debenture
- The buyer holds an ownership interest in another entity that changes affiliation
- The practice has been declined once and the file needs to be read before it is presented again
- The closing date is fixed by a lease assignment and the guaranteed path timeline is tight
- The seller is staying on as an employee, which changes how the transition is documented
The figures behind the model
| What it measures | Market range | Confidence | How to read it |
|---|---|---|---|
| Prime rate | 6.75%4 | VerifiedAugust 2026 | The index most guaranteed loans price over. |
| 7(a) guaranty fees | At statutory maximums (Notice 5000-872051)5 | VerifiedAugust 2026 | The fee schedule by loan size for the current fiscal year. |
| 7(a) maximum | $5,000,000, guaranty 85% to $150,000 and 75% above6 | VerifiedAugust 2026 | The ceiling on a single guaranteed loan. |
| 504 debenture | About 6.2% on the 20-year and 6.17% on the 25-year, July 20267 | VerifiedJuly 2026 | The fixed portion on a real estate structure, when the purchase includes property. |
Keep the numbers
Email me this scenario
The page stays open either way. This sends a copy of the inputs you noted, so the numbers are in your inbox when you sit down with an accountant or a partner.
What owners ask about this calculator
01Is the guaranteed path always more expensive?
In fees, usually. In monthly cash, usually not. The guaranty fee and the longer amortization pull in opposite directions, so a buyer with limited cash often pays more in total and stays solvent through the transition, which is a defensible trade.
02Can the guaranty fee be financed?
It commonly can be included in the loan, which raises the amount and the payment slightly while preserving cash at closing. The fee schedule depends on loan size and the fiscal year, and both sit in the figures beside this model with their dates.
03How much cash does each path require?
Conventional practice lenders commonly expect a larger injection than the guaranteed path. The exact figure varies with collections, credit, and whether real estate is included. Model both closing requirements alongside the payment, because the cash left in the practice funds the first quarter.
04What if the practice is turned down on the guaranteed path?
A decline is a file problem more often than a program problem. Coverage, transition risk, and documentation gaps drive most of them. The same file frequently proceeds under a different structure once the specific objection is identified and addressed.
05Does Practition Finance submit the application?
No. Practition Finance publishes the figures, collects an inquiry with consent, and refers it to funding partners. Each partner runs its own process, prepares its own paperwork, and communicates every fee and condition directly with the buyer.
Sources
- 1U.S. Small Business Administration, 7(a) fees
- 2U.S. Small Business Administration, 504 loans
- 3Federal Reserve, H.15 selected interest rates
- 4Lendio, sbaloanindex.com
- 5NAGGL
- 6SBA-derived calculators
- 7sbaloanindex.com
When both totals are on the table, send the request for team review