SBA 7a + 504 Combined Loan Calculator

Two ceilings that
no longer consume each other

The cumulative cap across both programmes went from $5m to $10m on 4 July 2026. The individual caps did not move — a single 7(a) still stops at $5m and the CDC debenture at $5m, or $5.5m on a qualifying public-policy project. This is not a $10m loan. It is two facilities that used to cancel each other out, modelled together.

Two programmes, one project504 funds fixed assets and nothing else. 7(a) funds the operating business, working capital and closing. The split is not a preference — it is what each programme is permitted to touch.

Three ceilings, not one$5m on a single 7(a), $5m on the debenture, $10m combined. Only the third moved. A structure built on “$10m” as one facility cannot exist.

Both sides take an injection10% of the fixed assets on the 504 side and 10% of everything else on the 7(a) side, separately. A stack showing one injection understates the cheque.

Fees, one-time and ongoingGuaranty fee on the guaranteed portion at a tiered rate, CDC fees, bank points, and the annual service fees that appear on no settlement statement.

Coverage under rate shockOnly the 7(a) is priced on Prime. The debenture fixes when it sells, and the bank first is conventional paper that reprices at its call rather than with the index — so a Prime move hits one piece of this stack directly and the others on their own schedule.

Eligibility gatesOccupancy, job creation, the alternative size standard and debt service coverage. Pass or fail, and they fail late.

Combined cap504 splitGuaranty fee tiersOngoing feesBlended rateDSCRRate shockOccupancyJob creationStandby seller noteBalloon and call

The project$10.12M

$5.10M fixed assets504 eligible$5.02M everything else7(a) only

Operating business

Goodwill and going concern. 7(a) only.

Real estate

Owner-occupied. 504 eligible.

Equipment

Long-life. 504 eligible.

Working capital

Closing costs

Qualifies as an energy or manufacturing public-policy project — raises the CDC cap to $5.5m.

504 structure

A car wash, hotel or business under two years old raises the injection and shrinks the debenture.

7(a) injection

Injection %

Minimum 10% on a change of ownership.

Of which seller note on standby %

Counts toward the injection only on FULL standby — no principal and no interest for the life of the SBA loan.

Exit and call

Bank note call, years

When the balance is due, not when it amortizes out. Rarely the same number.

Assumed exit, year

Sell or refinance. Drives the prepayment view.

504 bank first mortgage

Rate %

Conventional paper, quoted by the bank. Not priced on Prime — typically off a Treasury or swap index, or the bank’s cost of funds, and usually called or repriced well before the amortization ends.

Senior note

Rate %

Term, years

Shorter than the SBA paper, which is why it costs coverage.

Coverage

Normalized EBITDA

Buyer salary

The capital stack

504 finances fixed assets. 7(a) finances everything else. The split below is not a preference — it is what each programme is permitted to fund.

SBA 7(a)Business, working capital and closing · 10.00% variable, 10yr$4.52M

Bank first mortgage — senior lienConventional, no SBA guaranty · 8.75%, 25yr · 50% of fixed assets$2.55M

504 CDC debenture — second lienFixed 6.3% for 25 years · cap $5.00M · 40% of fixed assets$2.04M

Seller note on full standbyCounts toward the injection · no principal or interest during the SBA loan$251K

Borrower cash$510K at 10% on fixed assets, $251K on the 7(a) side$761K

Total project$10.12M

$6.56M

SBA exposure · cap $10.0M

$94K

Total monthly · 8.82% blended

1.48×

DSCR after owner salary

Both sides need an injection. The 504 takes 10% on the fixed assets and the 7(a) takes 10% on everything else — $1.01M in total, of which $761K is cash. A stack that shows only the 504 injection understates the cheque by $502K.

Only two of those four lines count against the $10m ceiling. The 7(a) balance and the CDC debenture are SBA exposure. The bank first mortgage is conventional lending and the equity is yours — neither touches the cap.

The $5m cap binds the debenture, not the project. At 40% the 504 side alone supports a fixed-asset project of about $12.50M before the debenture caps out — the bank first mortgage carries the rest and never touches the SBA ceiling.

What changed on 4 July 2026

Before

$5.00M

One $5m ceiling across both programmes. $5.00M of 7(a) left nothing for the debenture, whatever the project needed.

From 4 July 2026

$6.56M

Two independent $5m ceilings. $4.52M of 7(a) and $2.04M of debenture, side by side on one project.

$1.56M of SBA capacity this deal could not have reached before. The same project, the same underwriting — the ceiling was the only thing in the way.

Both programmes are within their individual caps and the combined exposure is under $10m.

Sequencing is not settled. The SBA framed this as borrowers who secure a 7(a) first then accessing 504 capacity. Whether an existing 7(a) borrower can reach the new 504 capacity retroactively, and how quickly lenders update their credit policies, are both open. Confirm with the CDC and the 7(a) lender before structuring around it.

Two ceilings thatno longer consume each other

Two ceilings that
no longer consume each other