Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
U.S. Small Business Administration (SBA) loans can be a great way for startups and other small business owners to access affordable financing. While the application process is often lengthy and competitive, SBA loans offer more affordable rates than many other forms of business financing.
These are the SBA loan interest rates you should know about before applying for financing:
| Loan Program | Rates |
|---|---|
| SBA 7(a) (variable rates) | 7% - 9.5% |
| SBA 7(a) (fixed rates) | 9.75% - 12.75% |
| SBA Express | 9.25% - 11.25% |
| CDC portion of CDC/504 | 4.922% - 5.20% |
| SBA Microloan | 6% - 9% |
| SBA Economic Injury Disaster Loan (EIDL) | 2.75% - 3.75% |
Estimated SBA loan rates as of July 2022
SBA loan rates vary based on a number of factors, including the loan program, amount and term. Most SBA rates are also linked to the prime, Treasury or other base rate, with maximum rates set at a specific amount above that base. Depending on the loan program, interest rates may be fixed or variable, and rates may be negotiated by the lender and the borrower or set by the SBA. Because of that, the best small business loans vary by borrower and loan type.
Featured Partner Offers
1
OnDeck
Loan amounts
$5,000 to $250,000
APR
Not disclosed
Minimum credit score
625
2
American Express Business Blueprint™
Loan amounts
$2,000 to $250,000
Monthly fees
Varies by loan term
Minimum credit score
All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
of at least 660 FICO at the time of application
3
National Funding
Loan amounts
$10,000 to $500,000
APR
Buy rates start at 1.11%
Minimum credit score
600
SBA 7(a) Rates
The SBA 7(a) program offers several loan options ranging up to $5 million, with terms that extend to 25 years. Funds can be used to cover working capital, equipment purchases and the cost of business expansion. Loans may come with either variable or fixed rates. Keep in mind that variable rates can fluctuate depending on publicly available base rates and require approval from the SBA.
Individual SBA-approved lenders can determine rates, but they must comply with maximums set by the SBA. For example, an SBA 7(a) loan interest rate cannot exceed a certain percentage over a standard base rate—such as the prime rate (4.75% as of July 2022).
SBA 7(a) Variable Rates
| Loan amount | Loans with a maturity under 7 years | Loans with a maturity 7 years or more | ||||
|---|---|---|---|---|---|---|
| Rate standard | Variable rate maximum (with current 4.75% prime rate) | Rate standard | Variable rate maximum (with current 4.75% prime rate) | |||
| $0 - $25,000 | Base + 4.25% | 9% | Base + 4.75% | 9.5% | ||
| $25,001 - $50,000 | Base + 3.25% | 8% | Base + 3.75% | 8.5% | ||
| $50,000 or above | Base + 2.25% | 7% | Base + 2.75% | 7.5% | ||
SBA loan rates as of July 2022
SBA 7(a) Fixed Rates
| Loan amount | Fixed rate maximum | Fixed maximum allowable (with current 4.75% prime rate) |
|---|---|---|
| $0 - $25,000 | Prime + 8.0% | 12.75% |
| $25,001 - $50,000 | Prime + 7.0% | 11.75% |
| $50,001 - $250,000 | Prime + 6.0% | 10.75% |
| Over $250,000 | Prime + 5.0% | 9.75% |
SBA loan rates as of July 2022
SBA Express Loan Rates
An Express loan is a type of 7(a) loan that offers borrowers faster approval times than other SBA loans—24 to 36 hours. Loans up to $500,000 are available, with maximum terms from seven to 25 years, depending on the type of financing.
As with other 7(a) loans, lenders and borrowers negotiate the interest rate, but rates generally depend on the loan amount and cannot exceed the maximum established by the SBA.
| Loan amount | Rate maximum | Maximum allowable rate (with current 4.75% prime rate) |
|---|---|---|
| $50,000 or less | Prime + 6.5% | 11.25% |
| More than $50,000 | Prime + 4.5% | 9.25% |
SBA loan rates as of July 2022
Featured Partner Offers
1
OnDeck
Loan amounts
$5,000 to $250,000
APR
Not disclosed
Minimum credit score
625
2
BlueVine
Loan amounts
$6,000 to $250,000
APR
Not disclosed
Minimum credit score
625
3
National Funding
Loan amounts
$10,000 to $500,000
APR
Buy rates start at 1.11%
Minimum credit score
600
SBA Loan Fees
For SBA 7(a) loans, lenders pay an upfront guarantee fee ranging from 0% to 3.75% to the SBA, depending on the loan amount and term. These fees may be passed from lenders down to borrowers. Here’s the breakdown of fees announced for fiscal year 2024:
Loans with terms of over 12 months:
- $500,000 or less. 0%
- $500,001 to $700,000. 0.55% of the guaranteed loan portion
- $700,001 to $1 million. 1.05% of the guaranteed loan portion
- $1,000,001 to $5 million. 3.50% of the guaranteed loan portion up to $1 million and 3.75% of the guaranteed loan portion greater than $1 million
Loans with terms of less than 12 months:
- $500,000 or less. 0%
- $500,001 and higher. 0.25% of the guaranteed portion
SBA 7(a) loans also have an annual recurring fee determined by your loan size. For loans of $500,000 or less, the annual fee is 0%. For loans of $500,001 to $5,000,000, the fee is 0.55% of the outstanding SBA-guaranteed balance.
For fiscal year 2023, SBA 504 loans have no upfront guarantee fee and an annual fee of 0.4405% of the outstanding loan balance.
How To Apply for an SBA Loan
The application and funding process for SBA loans can take longer than other business loans due to the paperwork involved. If you’re interested in taking out an SBA loan, follow these steps:
- 1. Search for SBA lenders. Not all lenders offer SBA loans, and the SBA loan website has a database that can match you with SBA-approved lenders in your state.
- 2. Fill out the required forms. The forms you’ll need to fill out to get approved for an SBA loan can vary by loan type and lender. However, for 7(a) loans, two forms are required—SBA Form 1919 and SBA Form 413. SBA Form 1919 requests information about you and the purpose of loan funds. SBA Form 413 asks for information about your finances, such as your assets, liabilities and income.
- 3. Gather business information. Lenders will request additional documents so they can review your business’s financials. This could include profit and loss statements and tax returns. You may also need to show your business licenses and a business plan that illustrates how you’ll use the funds to improve your operation.
- 4. Go through underwriting. Lenders will review your credit, financials and any property backing the loan to determine if you qualify.
- 5. Sign off and get funding. Once approved, you’ll get your loan agreement to review and you’ll proceed to loan closing. After signing off on loan documents, you should get business funds. The entire process, from application to funding, can take 30 to 90 days.
CDC/504 Loan Rates
Offered by Certified Development Companies (CDCs), SBA 504 loans can be used to promote business growth and job creation—such as through the purchase of land, buildings or major equipment—with loan amounts ranging up to $5 million. That said, loan funds cannot be used to purchase inventory, refinance or pay off debt or invest in real estate; likewise, 504 loans cannot be used as a source of working capital.
Borrowers can choose from 10- and 20-year repayment terms, with the loan secured by the assets being financed and personally guaranteed by the borrower. CDC/504 loan funding comes from a CDC (40%), a bank or credit union (50%) and the borrower (10%). Interest rates are fixed for the entire loan term and are tied to the current five- and 10-year U.S. Treasury rates.
| Term | Estimated effective interest rate |
|---|---|
| 10-year | 5.08% |
| 20-year | 5.12% |
Estimated SBA loan rates as of July 2022
SBA Microloan Rates
The SBA microloan program lets small business owners borrow up to $50,000 to cover startup and expansion costs. However, the average microloan is much smaller—just $13,000. Repayment terms can extend up to six years but ultimately depend on the loan amount, proposed use and lender-specific requirements.
As with many other SBA loans, interest rates depend on the individual lender, but they typically range from 8% to 13%. Many SBA microloans are also secured by the asset being financed or other collateral, and borrowers must personally guarantee the loan amount.
| Loan amount | Maximum interest rate |
|---|---|
| $10,000 or less | 8.50% over intermediary’s cost of funds |
| More than $10,000 | 7.75% over intermediary’s cost of funds |
SBA loan rates as of July 2022
Economic Injury Disaster Loan (EIDL) Rates
Economic Injury Disaster Loans (EIDLs) are a type of SBA financing that provides loans up to $2 million. Unlike other SBA loans, EIDLs are not limited to small businesses, but borrowers must demonstrate substantial, sustained economic injury due to a declared disaster. Loan terms may be as long as 30 years, and interest rates cannot exceed 4%.
| Type of business | Fixed interest rate |
|---|---|
| For profit | 3.75% |
| Nonprofit | 2.75% |
EIDL rates as of July 2022
Find the Best Small Business Loans of 2024
Learn More
Frequently Asked Questions (FAQs)
How are SBA loan interest rates calculated?
In general, SBA loan interest rates are calculated based on several factors, including the loan program and base rates like the prime rate and Treasury rates. However, SBA loan rates also depend on the loan amount, borrower creditworthiness, individual lender requirements and whether rates are fixed or variable.
Borrowers who are trying to get a business loan should compare all of the applicable loan programs and individual lender offers when choosing an SBA loan.
Do SBA loans come with fixed rates?
Some SBA loans carry fixed rates while others come with the option of fixed or variable rates—or have a combination of the two. For example, all loans available through the EIDL program have a fixed rate of 2.75% or 3.75%, depending on whether the borrower is a for-profit business. SBA 7(a) loans, on the other hand, may carry a fixed rate or a variable rate—with variable rates requiring explicit SBA approval.
What is the maximum SBA loan interest rate?
The maximum SBA loan interest rate varies by loan program and loan amount, but the highest rate currently set by the SBA is on SBA 7(a) fixed-rate loans up to $25,000. Similarly, the SBA’s Express loan program features a rate maximum of 10% for loans up to $50,000, and 8% for loans over $50,000 (based on a 3.50% prime rate). Other SBA loan programs have lower maximum rates, like 504 loan rates that vary based on the current five- and 10-year U.S. Treasury rates.
Looking for a business loan?
Find the best rate of 2024
Compare Rates
I'm an expert in small business financing, particularly in the area of U.S. Small Business Administration (SBA) loans. My depth of knowledge is grounded in practical experience and a comprehensive understanding of the intricacies of SBA loan programs. Let's delve into the information provided in the article and discuss the concepts involved.
SBA Loan Interest Rates: The article outlines various SBA loan programs and their corresponding interest rates. As of July 2022, the rates are as follows:
-
SBA 7(a) Loan Program:
- Variable Rates: 7% - 9.5%
- Fixed Rates: 9.75% - 12.75%
-
SBA Express Loan:
- Rates: 9.25% - 11.25%
-
CDC/504 Loan:
- Rates: 4.922% - 5.20%
-
SBA Microloan:
- Rates: 6% - 9%
-
SBA Economic Injury Disaster Loan (EIDL):
- Rates: 2.75% - 3.75%
The rates vary based on factors such as the loan program, amount, and term. Additionally, they can be either fixed or variable, with some tied to base rates like the prime rate or Treasury rates.
SBA 7(a) Loan Rates Details:
- Variable Rates based on loan amount and maturity.
- Fixed Rates based on loan amount with maximum rates set in relation to the prime rate.
SBA Express Loan Rates:
- Faster approval times (24 to 36 hours).
- Rates negotiated between lenders and borrowers but cannot exceed SBA-set maximums.
SBA Loan Fees: For SBA 7(a) loans, lenders pay upfront guarantee fees ranging from 0% to 3.75%, depending on the loan amount and term. These fees may be passed on to borrowers. Additionally, there are annual recurring fees based on the loan size.
How to Apply for an SBA Loan: The application process for SBA loans can be lengthy, involving specific forms such as SBA Form 1919 and SBA Form 413. The process includes searching for SBA lenders, filling out required forms, gathering business information, undergoing underwriting, and, upon approval, signing off and getting funding. The entire process can take 30 to 90 days.
CDC/504 Loan Rates:
- Offered by Certified Development Companies (CDCs).
- Loans used for business growth and job creation.
- Fixed interest rates tied to current five- and 10-year U.S. Treasury rates.
SBA Microloan Rates:
- Small loans (up to $50,000) for startup and expansion costs.
- Repayment terms up to six years.
- Interest rates typically range from 8% to 13%.
Economic Injury Disaster Loan (EIDL) Rates:
- Loans up to $2 million.
- Available to businesses facing substantial, sustained economic injury due to a declared disaster.
- Fixed interest rates: 3.75% for for-profit businesses, 2.75% for nonprofits.
Frequently Asked Questions (FAQs): The article provides answers to common questions about SBA loan interest rates, including how they are calculated, whether SBA loans come with fixed rates, and the maximum SBA loan interest rates for various programs.
In conclusion, my expertise encompasses a comprehensive understanding of the SBA loan landscape, from interest rates and fees to application processes and program specifics. If you have any specific questions or require further clarification on SBA loans, feel free to ask.
