Reviewed by
Understanding how much interest you'll pay on an SBA loan is important. Since the rate sets your monthly payment and the total cost of the loan, it's key to figuring out how affordable an SBA loan will be.
The good news is that SBA loan rates are often competitive. That's because the U.S. Small Business Administration (SBA) doesn't originate its own loans. Instead, approved private lenders issue SBA loans. But since the SBA guarantees part of each loan, it lowers their risk, which lets them offer a lower rate.
Each SBA loan rate is built the same way. First, there's a base rate, like the prime rate, currently 6.75%. Then a markup is added on top. The maximum markup for an SBA loan varies by the loan amount. The details on base rates, markups, and caps are outlined below.
For more than 15 years, I've helped many entrepreneurs get financing for their businesses, and without question, interest rates are one of the top questions my clients ask.
Something else to keep in mind: New rules that took effect in 2026 let lenders choose from several base rates for variable 7(a) loans. So instead of being tied only to the prime rate, your variable SBA rate can track other base rates. Below, I'll go over each program's current rates, how your rate gets set, and the changes that happened in 2026.
| Program | How the rate is set | Typical rate in 2026 | Maximum loan amount | Typical term |
|---|---|---|---|---|
| SBA 7(a) | Base rate (most often prime, currently 6.75%) plus a lender spread the SBA caps by loan size; can be variable or fixed | Up to roughly 9.75%–13.25% at today's prime rate, depending on loan size; many loans price below the cap | $5 million | Up to 10 years (working capital, equipment); up to 25 years (real estate) |
| SBA 504 | Pegged to an increment above the 10-year Treasury (currently 4.53%); fixed for the full term, set at the monthly debenture sale | A fixed rate modestly above the 10-year Treasury, generally below comparable 7(a) pricing | $5.5 million (CDC/debenture portion) | 10, 20, or 25 years |
| SBA Microloan | Set by the nonprofit intermediary lender that delivers the loan | Generally 8%–13% | Up to $50,000 (about $13,000 on average) | Up to 7 years |
Interest Rates for SBA 7(a) Loans
Most people mean 7(a) when they say "SBA loan." A 7(a) uses the base-rate-plus-markup model, and the SBA caps the lender's markup by loan amount.
| Loan amount | Maximum spread over the base rate | Maximum rate at the current 6.75% prime |
|---|---|---|
| $50,000 or less | Prime + 6.5% | 13.25% |
| $50,001 to $250,000 | Prime + 6.0% | 12.75% |
| $250,001 to $350,000 | Prime + 4.5% | 11.25% |
| More than $350,000 | Prime + 3.0% | 9.75% |
The figures in the chart are the maximum markups a lender can charge. Actual rates are often lower, and they'll depend on the specific terms of your SBA 7(a) loan.
Rates can also vary by structure. If your loan has a variable rate, it moves with its base rate (most often prime) over the term of the loan. As of March 1, 2026, lenders can tie a variable 7(a) to one of five base rates: prime, the optional peg rate, the five-year Treasury, the 10-year Treasury, or the secured overnight funding rate (SOFR). That change comes from a February 2026 rule from the Federal Register. If it has a fixed rate, it stays constant for the whole term. Loan amount sets the maximum spread over the base rate, and lenders can't go above the margin allowed for that size or pick one rate high and another low.
For example, a $400,000 SBA 7(a) loan can't carry a rate above prime + 3.0%, while a $40,000 loan can reach prime + 6.5%. That's because smaller loans cost more to process, so the SBA lets lenders charge a higher spread to offset some of those costs. When you weigh different offers, compare APRs, and the all-in cost including fees, not just the rates.
Calculating Your SBA Interest Rate
Here's what that math looks like on a real loan. Say you take a $200,000 7(a) loan with prime at 6.75%. That loan size caps the markup at prime + 6.0%, so the most a lender can charge you is 12.75%. If your lender quotes prime + 2.5% instead, your rate is 9.25%. That's the whole calculation. You take the base rate, add the markup, and the SBA's cap sets the ceiling.
Our SBA loan calculator goes more in-depth on how to calculate your own interest rate.
Interest Rates for SBA 504 Loans
Let's start with the 504, because most borrowers get tripped up by how its pricing differs from the 7(a).
Instead of marking up a base rate like the prime rate, a 504 uses the 10-year Treasury. The U.S. Department of the Treasury sets that rate when it sells government bonds to fund federal spending, and those bond sales also serve as benchmarks for lots of other loans, from home mortgages to business lending.
As of June 2026, the 10-year Treasury yield was 4.53%, and a 504 rate is set a little above it. Once that rate locks in at the bond sale, it stays put no matter what the Treasury or prime rate does later, so you carry the same rate for the life of the loan.
A 504 usually costs less than a 7(a) because of how the deal is built. It pulls from three sources. A private lender covers about 50% of the total project cost, the SBA-backed portion covers up to 40%, and you put in the remaining 10%. The government-backed piece prices low, which pulls down the blended rate on the whole deal.
Unlike a 7(a), a 504 can only go toward fixed assets like owner-occupied commercial property and long-life equipment such as heavy machinery, so you can't use it for working capital or inventory. And while a 7(a) caps at $5 million, the SBA-backed portion of a 504 caps at $5.5 million, with terms of 10, 20, or 25 years. Starting July 4, 2026, the SBA's higher combined ceiling lets you pair a 7(a) and a 504 for up to $10 million total, though each program's own cap stays the same.
Our 504 vs. 7(a) comparison breaks it down further.
Interest Rates for SBA Microloans
SBA microloans have an upper limit of $50,000. Rates vary depending on who delivers the loans because the nonprofits set their own rates. Typically, the rate will be somewhere from 8% to 13%.
The average balance size is significantly less than the other two options at around $13,000, and the repayment period will also be somewhat longer. Repayment terms for Microloans are capped at seven years.
There are restrictions regarding what you can do with the money. For example, you cannot repay existing debts using your Microloan funding. You also may not purchase property with Microloan proceeds.
Fixed vs. Variable Interest Rates for SBA Loans
Whether you pick a fixed or variable rate on your SBA loan mostly comes down to your situation and what you're comfortable with. Our fixed vs. variable rate guide goes deeper.
| Feature | Variable rate | Fixed rate |
|---|---|---|
| How it behaves | Rises and falls with its base rate over the life of the loan | Stays the same from closing to payoff |
| Which programs offer it | A 7(a) loan can be variable | A 504 loan is always fixed, and a 7(a) loan can be fixed too |
| Upside | Can start lower and helps you if rates fall | Steady, predictable payments |
| Trade-off | Costs more if rates rise | Gives up the chance to benefit if rates fall |
SBA Loan Rates Compared to Banks and Online Lenders
SBA loan rates usually run well below what commercial banks and online lenders charge, but they're not always the right fit. The lender behind the loan matters too, and we hold the highest trust rating in the industry.
SBA rates usually run lower
Since the government guarantees part of each SBA loan, the lender takes on much less risk and can charge less than it would on a commercial bank loan without that backing (SBA, 7(a) loans).
The trade-off is speed and paperwork
Getting SBA approval is document-heavy and takes weeks. When time matters, faster options like a business line of credit or a short-term business loan cost more but give you quicker access to cash.
APR vs. sticker rate
When you compare two loans, fold in the fees too, like the SBA guaranty fee and annual servicing fee. A lot of people compare one loan's sticker rate to another's APR. APR includes the rate plus all the fees, so it's the real number to compare. Here's how to figure out the true cost of debt.
How Often Do SBA Loan Rates Change?
People sometimes confuse how often a lender changes its rate with how often your interest rate actually moves. Here's the timing, and what triggers a change.
A variable rate follows its base rate. As the base rate moves, your variable SBA rate moves with it. The prime rate moves based on decisions from the Federal Reserve, and Treasury rates move with conditions in the U.S. bond market.
Fixed rates don't change at all. Your fixed 7(a) or 504 rate is locked in at closing and doesn't move, no matter what the prime or Treasury rate does later.
The rate on an SBA 504 loan resets each month for new borrowers. A new 504 borrower's rate is set when that month's bond sale happens, so the "current" 504 rate updates monthly. But once your rate is set, it doesn't change.
Apply for an SBA Loan
At Clarify Capital, we go over which SBA program and rate fit your business and source financing across our network of 75+ vetted lenders.
We've financed more than 50,000 businesses and over $1 billion, with a 24-hour average funding time on many of our financing options. When you're ready, you can apply today and see what you qualify for.
Frequently Asked Questions on SBA Loan Rates
Still have questions about SBA loan interest rates? I've broken down some of the most common questions that I hear from clients below.
What Is the Current Interest Rate on an SBA Loan?
It depends on the SBA program. A 7(a) rate is the prime rate (6.75% right now) plus a markup that the SBA caps between 3.0% and 6.5% by loan amount, so the maximum works out to about 9.75% to 13.25% today, and it's usually well below that. A 504 rate is fixed and tied to the 10-year U.S. Treasury rate (4.53% as of June 2026). Microloan rates usually fall between 8% and 13%.
Are SBA Loan Rates Fixed or Variable?
Both. A 7(a) loan can be fixed or variable. A fixed rate holds until maturity, and a variable rate resets with its base rate. A 504 loan is fixed for the whole term. Most Microloan lenders set their own rates.
What Is the Interest Rate on an SBA 7(a) Loan?
On a variable 7(a) loan, the rate is the base rate plus a markup that the SBA caps by loan amount. That cap runs from prime + 6.5% on loans of $50,000 or less down to prime + 3.0% on loans above $350,000. At today's 6.75% prime, that's a ceiling of about 13.25% down to 9.75%. Fixed-rate 7(a) loans use the SBA optional peg rate for their cap.
Is a 7% Interest Rate High for a Business Loan in 2026?
No. Variable 7(a) rates can sit in the low teens at the caps, so 7% would be on the low end for a 7(a). A fixed 504 rate, set off the 10-year U.S. Treasury rate (4.45% as of late May 2026), can land in a similar range. Next to many online or short-term loans, 7% is very competitive.
How Much Is the Monthly Payment on a $1,000,000 Business Loan?
It depends entirely on the rate and the term. The same $1 million costs very different amounts over 10 years versus 25. The cleanest way to get real numbers for your situation is to run them through our SBA loan calculator.
What Is the 20% Rule for SBA Loans?
It's about ownership, not rates. Anyone who owns at least 20% of the business usually has to personally guarantee an SBA loan (13 CFR 120.160).
Is My Information Secure When I Apply?
Yes. Clarify follows SOC 2 security principles to protect the information you share when you apply. And checking your options will not affect your credit score, so you can explore your eligibility without any risk to your credit.
Michael Baynes
Co-founder, Clarify
Michael has over 15 years of experience in the business finance industry working directly with entrepreneurs. He co-founded Clarify Capital with the mission to cut through the noise in the finance industry by providing fast funding and clear answers. He holds dual degrees in Accounting and Finance from the Kelley School of Business at Indiana University. More about the Clarify team →
Related Posts
