Most 7(a) term loans are repaid with monthly payments of principal and interest. For fixed-rate loans, the payments stay the same because the interest rate is constant, whereas for variable rate loans the lender can require a different payment amount when the interest rate changes. We may establish the loan with interest-only payments during the start-up, construction and expansion phases (when eligible) to allow your business time to generate income before it starts making full loan payments. There are no balloon payments or call provisions on these loans. We do not charge a prepayment penalty if the loan is paid off before maturity, but the SBA will charge the borrower a prepayment fee if the loan has a maturity of 15 or more years and is prepaid during the first three years.