An SBA loan is still a loan: you pay interest, and there are fees. The structure is predictable even though the exact numbers move with the market and with each SBA fiscal year.
How the interest rate is set
On a 7(a) loan, the rate is usually a base rate plus a spread that you negotiate with the lender. The base rate is commonly the prime rate (or another published index), and the SBA caps the maximum spread a lender can add, so there is a ceiling on what you can be charged. Rates can be variable (they move with the base rate) or fixed.
On a 504 loan, the CDC portion carries a long-term fixed rate that is set when the loan’s debenture is funded, tied to market rates at that time. The lender’s portion is negotiated separately.
Because base rates move constantly, two businesses approved months apart can see very different rates.
The fees
The main SBA-specific cost is the guaranty fee, a percentage of the guaranteed portion of the loan. It scales with loan size and term, and the SBA has, in some years, reduced or waived it for smaller loans. The exact percentages are set by SBA fiscal year and change, so treat any specific number you read online as potentially out of date.
On top of that, lenders may charge their own packaging, closing, or servicing fees, and the 504 program has its own fee schedule on the CDC portion.
Why this guide does not list exact percentages
Rate caps and fee percentages are reset by the SBA, often annually, and quoting a stale figure would do more harm than good on a decision this important. For the current numbers, go to the source: the SBA’s loan pages and your lender’s term sheet.
Before you rely on this
Confirm current rates, caps, and fees with the SBA and the lender making your offer. This guide is general information, not financial advice.