Because the Small Business Administration backs them, SBA loans are more competitive with a maximum interest rate that a lender can charge. While SBA loan rates tend to be lower than average business loan rates, the exact rate a business receives depends on the lender and the loan amount.

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New SBA rule changes take effect in May 2023 with the goal of simplifying the lending process and increasing access to underservered markets.

Current SBA 7(a) loan interest rates

SBA 7(a) loans, the most common type of SBA loan, are not one-size-fits-all. Different types include Standard 7(a), 7(a) Small, Express, Export Express, Export Working Capital, International Trade and CAPLines. Although every SBA 7(a) loan is slightly different, most are subject to maximum fixed or variable interest rates — regardless of your lender. 

SBA variable rate loans

7(a) loan amount Loan paid off in under 7 years Loan paid off in 7+ years
$25,000 or less 12.50% 13%
$25,000 to $50,000 11.50% 12%
Over $50,000 10.50% 11%

Rates current as of May 2023; calculated with current prime rate of 8.25%.

SBA fixed-rate loans

7(a) loan amount Maximum fixed rate
$25,000 or less 16.25%
$25,000 to $50,000 15.25%
$50,000 to $250,000 14.25%
Over $250,000 13.25%

Rates current as of May 2023; calculated with current prime rate of 8.25%.

SBA Express loans

SBA Express and Export Express loans are SBA 7(a) loans with faster funding timelines and slightly higher maximum rates.

Loan amount for Express and Export Express Maximum rate
$50,000 or less 14.75%
Over $50,000 12.75%

Rates current as of May 2023; calculated with current prime rate of 8.25%.

SBA Community Advantage loan

The Community Advantage program is a pilot program set to expire on September 30, 2024. It’s designed to assist small businesses in underserved markets, including new businesses, businesses owned by veterans and businesses where more than 50 percent of the full-time workers are residents of low-income communities.

Community Advantage loan amount Maximum rate
$50,000 or less 14.75%
$50,001 to $250,000 14.25%
$250,001 to $350,000 12.75%

Rates current as of May 2023; calculated with current prime rate of 8.25%.

How SBA rates are set 

As with any business loan, your interest rate varies based on your business’s finances, creditworthiness, loan size and term, the lender you work with, your industry and other factors.

However, the SBA sets maximum rates for fixed and variable loans, meaning your chosen SBA 7(a) loan can’t exceed set rates. For variable-rate loans, the maximum is the base rate plus a set interest rate determined by the loan’s maturity date. For fixed-rate SBA 7(a) loans, the maximum is the prime rate plus a set interest rate.

Loan amount Fixed rate Variable rate — Less than 7 years Variable rate — 7+ years
$25,000 or less Prime rate + 6% + an additional 2% Base rate + 4.25% Base rate + 4.75%
$25,000 to $50,000 Prime rate + 6% + an additional 1% Base rate + 3.25% Base rate + 3.75%
$50,000 to $250,000 Prime rate + 6% Base rate + 2.25% Base rate + 2.75%
Over $250,000 Prime rate + 5% Base rate + 2.25% Base rate + 2.75%

The base rate for a variable loan can be the prime rate, LIBOR rate or optional peg rate.

The same applies to SBA Express and Export Express loans:

Express and Export Express loan amount Maximum rate
$50,000 or less Prime rate + 6.5%
Over $50,000 Prime rate + 4.5%

Interest rates for the Community Advantage program are set by the Wall Street Journal (WSJ) prime rate:

Community Advantage loan amount Maximum rate
$50,000 or less WSJ Prime + 6.5%
$50,001 to $250,000 WSJ Prime + 6%
$250,001 to $350,000 WSJ Prime + 4.5%

When comparing loans, try using a business loan calculator to see how different rates affect your monthly payments.

SBA loan fees

SBA 7(a) loans don’t charge common fees found with other business loans, such as processing fees, origination fees and application fees. But you will have to pay guarantee fees and annual service fees. 

Guarantee fees help cover the SBA’s costs if the loan defaults. Service fees compensate lenders for their participation and issuing of SBA loans. 

Most SBA loans are guaranteed up to 85 percent for loans of $150,000 or less and up to 75 percent for loans over $150,000. Express loans have a 50 percent maximum guarantee, and Export Express loans have a 90 percent guarantee maximum. 

The annual service fee based on the 2023 fiscal year — beginning Oct. 1 — is based on the total loan amount:

Loan amount Service fee for new loans
$500,000 or less 0%
Over $500,000 0.55% of the guaranteed portion of the outstanding loan balance

The SBA guarantee fee based on the 2023 fiscal year is:

Loan amount Guarantee fee for loan terms under 12 months Guarantee fee for loan terms over 12 months
$500,000 or less 0% 0%
$500,000 to $700,000 0.25% of the guaranteed portion 0.55% of the guaranteed portion
$700,000 to $1,000,000 0.25% of the guaranteed portion 1.05% of the guaranteed portion
$1,000,000 to $5,000,000 0.25% of the guaranteed portion 3.5% of the guaranteed portion up to $1,000,000, plus 3.75% of the guaranteed portion over $1,000,000

CDC/504 loans

504 loans are available through certified development companies (CDCs). CDCs are certified by the SBA to regulate nonprofits and promote community economic development. A CDC can help you gather what you need for a 504 loan and help you find the right lender. 

A 504 loan is a long-term, fixed-rate loan meant to help grow a business. It can be used for major fixed assets, like buying real estate, such as land and buildings, machinery and equipment. 

CDC/504 loan terms

Loan terms for 504 loans are 10, 20 or 25 years. The maximum loan amount for a 504 is $5.5 million. Like SBA 7(a) loans, 504 loans are subject to maximum interest rates and additional fees.

How 504 loan rates are set

Businesses are required to make a down payment of 10 percent on 504 loans. From there, the CDC funds 40 percent of the loan and the chosen lender funds 50 percent. The SBA guarantees the 40 percent funded by the CDC.

Lenders set the loan terms and interest rates but are subject to SBA standards. Interest rates for 504 loans are typically 3 percent of the total debt and are determined by the current market rate for 10-year U.S. Treasury bonds. Any fees for 504 loans can be included in the financed amount.

Frequently asked questions about SBA loan interest rates

  • Compared to other business loan options, SBA loans are less risky as they have a maximum interest rate, low fees and are guaranteed by the Small Business Administration. If your business qualifies for an SBA loan, you’ll have access to resources, various loan types and longer repayment terms.
  • While SBA loans are beneficial for many businesses, there are disadvantages. Depending on your business type, you may not qualify for an SBA loan. Additionally, there are strict application requirements, long waiting periods and the possibility for collateral, depending on the loan amount.
  • Loan terms vary depending on the loan type, but most SBA 7(a) loans typically have loan terms of 5, 10 and 25 years.
  • For an SBA 7(a) loan, an SBA lender may charge a prepayment penalty along with closing costs, late payment and referral fees. They can also charge a packaging fee of up to $5,000 for putting together your loan documents for the SBA to review. However, they are prohibited from charging origination fees and application fees.