Question 1

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

Accepted Answer

SBA 7(a) is a flexible lender loan that can finance working capital, acquisitions, equipment and real estate. SBA 504 is primarily for owner-occupied real estate and major fixed assets and commonly combines a bank first lien, a CDC/SBA debenture and a borrower contribution.

Question 2

How does this calculator estimate the SBA guarantee fee?

Accepted Answer

For 7(a), the calculator estimates the guaranteed portion using an editable guarantee percentage and applies the entered upfront fee rate to that portion. For 504, it applies the entered program fee rate to the CDC/SBA debenture. Actual fees vary by SBA fiscal-year notices, maturity, loan size and lender.

Question 3

What is DSCR for an SBA loan?

Accepted Answer

Debt-service coverage ratio equals annual net operating income or available business cash flow divided by annual loan payments. A DSCR above 1.0 means projected cash flow exceeds debt service; many lenders prefer a cushion around 1.15 to 1.25 or more, depending on the loan.

Question 4

Does an SBA 504 loan always require 10% down?

Accepted Answer

Ten percent is a common base borrower contribution, but startups, special-purpose properties and other situations may require a larger contribution. The calculator keeps the bank, CDC and borrower percentages editable so you can model the proposed structure.

Question 5

Is this an official SBA approval or quote?

Accepted Answer

No. This is an educational estimate, not an SBA or lender quote. Rates, fees, eligibility, collateral, required equity and underwriting terms must be confirmed with an SBA-approved lender or Certified Development Company.