The Small Business Administration (SBA) limits how much lenders can charge on these government-backed business loans. They’re much lower than what you’ll find online or even at some banks. But you’ll have to meet a long list of requirements to qualify.
All SBA loan rates for 2023
|Program||Maximum interest rate||Maximum loan amount||Maximum term|
|7(a) loans||5.75% to 8.25%||$5 million||10 or 25 years|
|7(a) small loans||5.75% to 8.25%||$350,000||10 years|
|CAPLines||5.75% to 8.25%||$5 million||5 or 10 years|
|SBA International Trade loans||5.75% to 8.25%||$5 million||25 years|
|Export Working Capital Program||No maximum rate, but it must be approved by the SBA||$5 million||3 years|
|Express loans||8.00% to 10.00%||$350,000||10 or 25 years|
|Export Express loans||8.00% to 10.00%||$500,000||7, 10 or 25 years|
|Veterans Advantage loans||8.00% to 10.00%||$350,000||10 or 25 years|
|504 loans||$5.5 million for CDC-funded portion||10, 20 or 25 years|
|Microloans||Cost to fund loan, plus 7.75% or 8.5%||$50,000||6 years|
|Disaster loans||4.00% on most loans||$2 million||30 years|
|Community Advantage loans||9.25%||$250,000||10 or 25 years|
|Paycheck Protection Loans||1.00%||$10 million||2 or 5 years|
SBA 7(a) loan rates for October 2023
The maximum rate for the popular 7(a) loan program depends on your loan amount and term. Generally, lower amounts and longer terms come with higher rates.
|Loan amount||Maximum rate for terms less than 7 years||Maximum rate for terms of 7+ years|
|$0 to $25,000||7.75%||8.25%|
|$25,001 to $50,000||6.75%||7.25%|
SBA 7(a) loans come with both fixed and variable rates. Fixed rates stay the same over the life of your loan, while variable rates can fluctuate with the market. The interest rate caps apply to both types of rates, however.
Maximum rates apply to SBA 7(a) programs, which include:
- Standard 7(a) loans
- 7(a) small loans
- SBA International Trade loans
SBA Express loan rates
SBA Express loans that differ from your typical 7(a) loan. Loan terms don’t affect the rate of an Express loan — only the loan amount.
Like with other 7(a) loans, larger loan amounts come with lower maximum rates.
|Loan amount||Maximum interest rate|
|$0 to $50,000||10.00%|
SBA Express loan rates apply to loans that include:
- SBA Veterans Advantage loans
- Export Express loans
CDC/504 loan rates for October 2023
CDC/504 loans can be more complicated than 7(a) loans. That’s because they’re made up of two loans: At least 50% of your financing can come from a bank or other SBA lender, and up to 40% can come from a nonprofit certified development company (CDC) licensed by the SBA. The remaining 10% comes from your business, with no interest rate.
|Lender||Maximum interest rate|
|CDC loan||Typically 3.00% to 4.00%|
The maximum rate a bank can charge through the CDC/504 Loan Program is 9.25%. However, some state laws override the maximum interest rate for a lower one.
The value of US Treasury bonds determines the rates on the CDC’s part of your loan.
SBA microloan rates for October 2023
If you’re getting a microloan through a nonprofit instead of your standard 7(a) lender, your interest rate depends on how much it costs your lender to fund your loan and how much you’re borrowing:
|Loan amount||Maximum interest rate|
|0 to $10,000||Cost of funds + 8.50%|
|Over $10,000||Cost of funds + 7.75%|
SBA disaster loan rates for October 2023
The disaster loan program is the only one that the SBA funds directly. It’s also by far the most straight-forward: Everyone that qualifies gets the same fixed rate.
- Economic Injury Disaster Loan (EIDL) rate: 4.00%
- Military Reservist Economic Injury Loan (MREIDL) rate: 4.00%
- Business Physical Disaster Loan rate: 4.00%
- Home and Personal Property Loan rate: 4.00% — or 8.00% if the SBA thinks you’re eligible for funding elsewhere
Coronavirus disaster loan rates
Economic Injury Disaster Loans for businesses affected by the coronavirus outbreak come with lower rates, depending on the type of business:
- Small business rate: 3.75%
- Nonprofit rate: 2.75%
SBA Community Advantage loan rates
Loans through this pilot program come with a maximum interest rate of 9.25%. The SBA uses the same formula to calculate the rate for the bank portion of a CDC/504 loan. Unlike other programs, the rate doesn’t depend on your loan amount or term.
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How does the SBA calculate maximum rates?
Each Small Business Administration loan program has its own way of calculating the maximum rate for loans in that program. Rates can also vary by SBA lender.
How the SBA calculates 7(a) rates
Maximum interest rates on SBA 7(a) loans are commonly based on the prime rate plus additional interest — even for fixed-rate loans.
The prime rate is a type of benchmark rate published in the Wall Street Journal. Benchmark rates depend on what lenders are charging their most creditworthy customers. The additional interest is a fixed rate that lenders can charge on top of the prime rate, which is 3.5%, as of March 2022.
|Loan amount||Maximum rate for terms less than 7 years||Maximum rate for terms 7+ years|
|$0 to $25,000||Prime rate + 4.25%||Prime rate + 4.75%|
|$25,001 to $50,000||Prime rate + 3.25%||Prime rate + 3.75%|
|Over $50,000||Prime rate + 2.25%||Prime rate + 2.75%|
The SBA calculates SBA Express loan rates for loans under $50,000 by adding the Prime rate + 6.50%. Loans over $50,001 get an interest rate based on the Prime rate + 4.50%.
How the SBA calculates CDC/504 rates
There are two different types of 504 rates: the rate you pay on the bank-funded portion of your 504 loan and the rate you pay on the CDC-funded portion of your loan.
How the SBA calculates the bank interest rate
The maximum bank rate for a CDC/504 loan is the prime rate plus 6%.
How the SBA calculates the CDC interest rate
The CDC interest rate is based on rates from the US Treasury bond market. The SBA calculates CDC interest rates by adding the 5-, 10- or 20-year Treasury bond rate to another fixed rate, called the swap spread. The treasury bond rate is sometimes referred to as the treasury yield.
Both the treasury and swap rates are published online. These change from month to month and go into effect on the first Thursday of the first full week of the month.
What does this mean for you?
If you take out a 10-year CDC loan in March 2020, your interest is based on the five-year treasury yield on March 5, 2020 — the first Thursday of the first full week of the month.
|CDC/504 loan||How the SBA calculates the maximum rate|
|CDC 10-year loan||5-year Treasury rate + swap spread|
|CDC 20-year loan||10-year Treasury rate + swap spread|
|CDC 25-year loan||20-year Treasury rate + swap spread|
|Bank loan||Prime rate + 6%|
What other costs should I consider?
Interest rates are among the top factors to look at when getting a loan, but it’s not the only cost to consider. SBA loans in particular can come with multiple fees charged by the government or your lender. Typically, you pay a fee to the SBA for backing your loan, though how that fee is calculated will depend on your program.
SBA 7(a) fees
The main fee associated with the 7(a) program is the SBA guaranty fee. An SBA guaranty fee offsets the risk the Small Business Administration takes on when backing your loan.
How much you pay depends on the portion of the loan that’s backed by the SBA — not your total loan amount. If the SBA guarantees 85% of a $100,000 loan, for instance, you’d pay a guaranty fee on $85,000.
|Guaranteed amount||Guaranty fee|
|$150,000 or less||2%|
|$150,001 to $700,000||3%|
|$700,001 to $5 million||3.5% up to $1 million, plus 3.75% on any amount over $1 million|
|All loans with a term of 12 months or less||0.25%|
SBA 7(a) loans also come with annual service fees that you pay on your outstanding balance each year. Today, that fee is 0.55% of the loan balance for all loan amounts.
CDC/504 borrowers pay an SBA guaranty fee, with the exception of 504 loans through the Debt Refinance Without Expansion Program. These come in addition to several other fees to the CDC, bank and any agencies that helped package your loan.
|Type of fee||Maximum cost||When you pay it|
|Guarantee fee||0.5%||When you get your funds|
|Lender participation fee||0.5% of the lender-funded amount||When you get your funds|
|CDC participation fee||1.5% of the CDC-funded amount||When you get your funds|
|CDC annual service fee||Every year|
|Central Servicing Agent fee||0.1% of the outstanding balance per year||Every month|
How much of a down payment do I need for an SBA loan?
Your business may also be required to partly front the costs of the project you need the SBA loan for — called a down payment or an injection. With SBA 7(a) and 504 loans, businesses are required to put down around 10% of the loan amount.
How much you pay as a down payment depends on your personal credit score, loan amount and lender.
How to qualify for an SBA loan
Most programs follow the same requirements as the 7(a) program — but may have some additional criteria.
7(a) loan requirements
These are the main SBA requirements for the 7(a) loan program:
- For-profit business
- Eligible type of business
- Meet SBA size standards for a small business
- Demonstrate a need for SBA funding
- Located in the US or its territories
- Show good character
- Positive history of handling debt
- Demonstrated ability to repay the loan
Lenders typically have requirements on top of the SBA’s criteria. You’ll likely need to meet minimum credit and revenue standards. And you’ll likely need to provide documents such as a debt schedule, business plan, owner resumes and more.
504 loan requirements
To get a 504 loan, you need to meet the requirements for a 7(a) loan, plus the following criteria:
- Business is worth $15 million or less
- Net income of no more than $5 million over two fiscal years
- Funded project must create or save jobs, or work toward a community development or public policy goal
SBA microloan requirements
The SBA microloan program follows the same requirements as the 7(a) program.
SBA disaster loans requirements
The disaster loan program doesn’t use 7(a) requirements. Different types of disaster loans have varying criteria. However, you generally must meet these basic requirements to qualify:
- Located in a designated disaster area — with the exception of MREIDLs
- Can’t qualify for funding elsewhere
A loan backed by the Small Business Administration can help you land some of the most competitive rates on the market. But these popular loans also come with a higher rejection rate than any other type of business financing.
Read our guide to business loan rates to see how competitive SBA rates really are.
Rates are sourced from: www.sba.gov, www.treasury.gov and www.federalregister.gov
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