What's the best loan option for a small business?

The best loan option for your small business depends on your needs and qualifications. If you're looking for low rates and have strong finances, an SBA or bank loan might be your best bet, while online lenders offer faster, more flexible options for businesses with less-than-perfect credit.

How are interest rates for SBA loans determined?

SBA loan rates are determined by a combination of the prime rate, which is set by the Federal Reserve, and a lender's markup based on factors like the loan amount and repayment term. Borrower qualifications, such as credit score and business financials, can also affect the final rate offered. The SBA sets maximum limits on how much lenders can add to the prime rate, ensuring rates stay competitive.

What's considered a good rate for a business loan?

A good rate for a business loan is one that's close to the prime rate, which is 6.75% as of January 2026. The prime rate is the baseline that banks use for their most creditworthy borrowers, so the closer your rate is to the prime rate, the better the deal. However, the best rates are typically reserved for businesses with strong credit, solid financials and a proven track record, so not everyone will qualify. To find the best rate possible for your business, compare quotes from multiple lenders and consider other factors like fees and terms.

Can I get a low-interest business loan with bad credit?

While it is possible to get a business loan if you have bad credit, you typically won't qualify for a competitive interest rate. To get a lower rate, consider putting up collateral, like real estate or equipment, to secure your loan and offset the lender's risk.