SBA loan rates are tied to a prime rate that fluctuates with the market. Lenders can charge borrowers a rate that falls somewhere between the base rate and the maximum rate set by the government. The current SBA maximum rate ranges from 11% to 16%.
Check out the most popular SBA loan programs and their rating structures to find out which one is right for your company.
How SBA loan interest rates work.
SBA loan rates are regulated by the US Small Business Administration. Private lenders negotiate their rates with each individual borrower. But the loan amount provided cannot exceed the limit set by the SBA for each loan program.
The limit is tied to the base rate, which can be one of the following:
- The main measure
- Optional pin rating
In most cases, however, you will find that lenders use the prime rate as the base rate. The borrower is then charged a percentage above that base rate. That amount depends on the amount of the loan, the type of SBA loan, and the maturity date of the loan.
Current SBA loan rates.
Here’s how each SBA interest rate goes down, based on the loan program and other details.
SBA 7(a) loan rates
SBA 7(a) loans can be used for general capital needs and have variable or fixed interest rates. Fixed rates have a higher premium but don’t change, even if the base rate increases over time. SBA 7(a) rates range from 3% to 8% above the base rate. Use the following table to compare rates for different loan sizes and terms. The current Wall Street Journal Prime Rate (November 2024) is 8.0%.
| Price | Maximum Fixed Rate |
| $25,000 or less | Main +8% |
| $25,000 – $50,000 | Main +7% |
| $50,000 – $250,000 | Main +6% |
| It’s over $250,000 | Main +5% |
| Price | Maximum Variable Rate |
| Up to $50,000 | Principal + 6.5% |
| $50,000 to $250,000 | Principal + 6.0% |
| $250,000 to $350,000 | Principal + 4.5% |
| It’s over $350,000 | Principal + 3.0% |
History of Prime prices
SBA 504 loan rates
SBA 504 loans are designed to purchase assets that help create jobs or business growth, such as new facilities, equipment, or renovations to an existing facility. These loans are available through certified development companies (CDCs) and offer fixed interest rates.
You can apply for a repayment period of 10 or 20 years. SBA 504 rates are indexed upwardly above current 5-year and 10-year US Treasury bond rates. The rate is usually up to 3% of the loan amount.
Historical US Treasury rates
SBA Microloan loan rates
Small loans from the SBA help new small businesses with start-up or expansion costs. Borrowers can be approved for up to $50,000, although the average loan size is $13,000. The maximum repayment period is six years.
Small loan rates are based on the borrower’s financial costs.
Loans over $10,000: 7.75% on finance charges
Loans of $10,000 or less: 8.5% on top of finance charges
Expect SBA micro loan rates from 8% to 13%.
SBA Express loan rates
SBA Express loans allow for a shorter approval time, so you can get quick access to money. In fact, you will get the first response within 36 hours. The maximum loan amount is up to $500,000 and the maximum amount is the same as an SBA 7(a) loan.
SBA Community Advantage loan rates
The SBA Community Advantage loan program was created to help businesses in underserved markets. These loans totaled $350,000. Interest rates were negotiated by the lender but were below SBA maximums. The program expires in October 2023. Lenders under this program are now licensed as community small business lenders in the 7(a) lending program and will continue to provide access to financing to underserved communities.
Standard SBA loan fees.
In addition to paying interest on an SBA loan, borrowers may pay an SBA Guarantee Fee up front.
Down payment on SBA 7(a) loans.
This fee is based on the approved loan amount, including both the secured and unsecured portions.
| Loans with a maturity of 12 months or less | |
| Borrowed Money | Money |
| $1 million or less | 0% |
| $1 million+ | 0.25% of the guaranteed portion |
| Loans with a maturity of more than 12 months | |
| Borrowed Money | Money |
| $1 million or less | 0% |
| $1 million+ | 3.5% of guaranteed portion up to $1,000,000 AND 3.75% of guaranteed portion over $1,000,000 |
Frequently Asked Questions
SBA loan rates vary depending on several factors, including the type of SBA loan, size, and maturity date. The current prime rate (as of November 7, 2024) is 8.5%. That means SBA 7(a) fixed loan rates can be between 13% and 16% depending on your loan terms.
No SBA loans are interest free. Direct lenders will always charge interest on SBA loans. In the early days of the COVID-19 pandemic, there was temporary assistance extended to business owners through existing SBA loans. This allowed the SBA to cover six months’ worth of principal, interest, and payments for borrowers with 7(a), 504, or subprime loans. However, the closing date was for the loan approved on September 27, 2020.
An SBA loan may come with a fixed amount or a variable amount. The interest rate structure varies depending on which one you choose. Compare loan offers from multiple lenders to make sure you have as many options as possible.
To calculate the monthly payments for your SBA loan, visit our SBA loan calculator. Need help finding the best interest rate for your SBA loan or other business term loan?
Apply with Lendio today!
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The information provided on this blog is for educational purposes only, and is not intended to be business, legal, tax, or accounting advice. The views and opinions expressed in this blog are those of the authors and do not reflect the official policy or position of Lendio. Although Lendio strives to keep its content up to date, it is only accurate as of the date posted. Offers or trends may be out of date, or may no longer be relevant.
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