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SBA Loan Rates - Current Rates For 2024

SBA Loan Rates 2020
Susan Guillory
Susan GuilloryUpdated January 11, 2024
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When you consider SBA loans and other financing options for your company, it’s important to know how much you’ll pay in interest over the term of a loan. A $10,000 loan, for example, will cost you more than $10,000 when you factor in the annual percentage rate (APR) and fees you pay on top of it.Typically, a Small Business Administration (SBA) loan is considered a more affordable form of financing. These loans can provide the working capital you need to grow your business.Maximum SBA loan rates are typically based on the Wall Street Journal (WSJ) prime rate in part, which itself is influenced by the Federal Reserve’s monetary policy. Borrowers and lenders can negotiate SBA loan rates, but the rate cannot exceed a certain percentage.Below we highlight SBA loan interest rates of 2024.

Current SBA 7(a) Loan Rates

SBA 7(a) loans can have either fixed or variable interest rates up to a maximum percentage. The maximum rate can change over time, because it’s based partly upon the WSJ prime rate or an optional SBA peg rate.The WSJ prime rate is 8.50% as of January 2024, and the SBA peg rate is 4.88% for the fiscal period of Jan. 1 through March 31, 2024.

SBA 7(a) Variable-Rate Loans

Here are the maximum allowable rates on a variable-rate SBA 7(a) loan as January 2024:
Loan amountMax rate
$50,000 or lessBase rate plus 6.5% (15%)
$50,001 to $250,000Base rate plus 6.0% (14.5%)
$250,001 to $350,000Base rate plus 4.5% (13%)
Greater than $350,000Base rate plus 3.0% (11.5%)

SBA 7(a) Fixed-Rate Loans

Here are the maximum allowable rates on a fixed-rate SBA 7(a) loan as January 2024:
Loan amountMax rate
Greater than $250,00013.50%
Greater than $50,000 and less than or equal to $250,00014.50%
Greater than $25,000 and less than or equal to $50,00015.50%
$25,000 or less16.50%

How Are SBA 7(a) Rates Determined?

There are a few factors that impact SBA loan rates. First, there’s the WSJ prime rate. This is the rate that banks offer their best clients, and it’s tied to the federal funds rate, which fluctuates based on market conditions.Borrowers and lenders can negotiate SBA loan rates, but the rate cannot exceed a certain percentage. As mentioned above, SBA loan rates are based on a base rate (usually the WSJ prime rate or an SBA peg rate) plus an add-on percentage that cannot exceed the SBA’s maximum allowable rate.Here’s where you come into play: your creditworthiness, the time you’ve been in business, your annual revenue, and the collateral you provide (where required), among other factors, will determine your specific interest rate.Someone with excellent credit and high-value collateral may get a lower interest rate on the same loan as someone else who hasn’t been in business long and doesn’t have great credit. If you identify more with the latter scenario, you might decide to work on building your credit and coming up with a stronger piece of collateral before applying for an SBA loan to have a possibly better chance of being approved at a lower rate.Recommended: Understanding Different Types of Small Business Loans

What Are SBA Loans?

SBA loans cover several different loan programs offered by the Small Business Administration. These loans are guaranteed by the SBA but offered by banks and some online lenders:
  • 7(a) Loan Program
  • Standard 7(a) loan
  • SBA Express
  • SBA Veterans Advantage
  • CAPLines
  • Export Working Capital Program
  • Export Express
  • Disaster Loans
  • Microloan Program
  • CDC/504 Real Estate & Equipment Loans
  • Community Advantage Loans
Each loan targets different purposes, with different funding limits. For example, the 7(a) loan, the most popular SBA loan, provides up to $5 million for renovation, construction, the purchase of equipment, and more. The microloan, on the other hand, has a cap of $50,000 and can be used for similar purposes.SBA loan requirements vary depending on the program. To potentially qualify for a 7(a) loan, you must run a for-profit business with fewer than 500 employees, among other criteria. For the Veterans Advantage loan, the business must be run by a veteran or family member of a vet.If you plan to apply for an SBA loan, make sure to read the requirements and funding limitations before applying to make sure you qualify. SBA loans are notorious for taking a while to process, so the better prepared you are in advance, the more likely you could be to receive the loan.SBA loan rates vary from loan to loan, so keep reading to find out how much you might pay in interest if you take out a loan from the SBA.Recommended: What Is the Typical Interest Rate on a Business Loan?

Other SBA Loans to Consider

If you need a small business loan, here are other SBA loan programs you can explore:

SBA 504 Loans

SBA 504 loans are provided through Certified Development Companies (CDCs), which are licensed by the SBA. 504 loans are actually composed of two separate loans: one from a bank (for 50% or more), and one from a CDC (for up to 40%). The rest comes from collateral you provide.CDCs are nonprofit organizations that promote economic development through these loans. They are certified and regulated by the SBA and work with the SBA and lenders that offer 504 loans to provide funds to qualified small businesses.To qualify for the 504 program, you must have a tangible net worth of $15 million or less and an average net income of $5 million or less after federal income taxes for the two years prior to applying.Per SBA rules, rates for 504 loans are based on the current market rate for 5-year and 10-year U.S. Treasury issues. The bank and the CDC may add other fees to that, as well. Your actual rate may vary depending on several factors, including the term of the loan, the project you are financing, and the real estate backing the loan. Recommended: SBA 504 Loans Versus 7 (a): What’s the Difference

SBA Express

If you want an SBA loan faster than normal, the SBA Express program might be worth exploring. It provides up to $350,000 at an average business loan interest rate of 4.5-6.5% above the prime rate. You may be able to receive funds within 36 hours of applying.

SBA Veterans Advantage

Qualifying veterans and their families can get access to both the 7(a) and SBA Express loans through this program and pay no guarantee fee for either. To qualify, the business must be run by a veteran, active-duty military in TAP, reservist, or National Guard member, or a spouse of any of these, or a widowed spouse of a service member or veteran who died during service, or a service-connected disability.Recommended: The Veteran Advantage: Starting a New Business

SBA Microloans

You can borrow up to $50,000 with the Microloan Program. Interest rates are typically between 8% and 13%, with a repayment period of up to six years.Requirements will vary by lender, and you may be required to provide collateral and/or a personal guarantee. You may also be required to participate in training or planning requirements to help you launch or expand your business.Recommended: What to Know About Microloans


The CAPLines program is designed to help small businesses keep cash flowing during short-term and cyclical cash crunches. Interest rates and qualifications follow those of the 7(a) program.

Export Working Capital Program

This program provides up to $5 million to be used for short-term working capital for exporters. The interest rates and qualifications are the same as those of the 7(a) program, with the additional requirement that borrowers must need short-term working capital for direct or indirect exporting.

Export Express

This program, also geared toward exporters, offers up to $500,000 to be used for anything that enhances a business’ export development. Interest rates follow the 7(a) program.

Community Advantage Loans

The Community Advantage Loan program is designed to assist small businesses in underserved markets and provides up to $250,000 in funding. Interest rates are the same as those of the 7(a) program.To qualify, your business must be for-profit and operate in an underserved area. Approval is not based on your balance sheet or collateral available.Recommended: Guide to Minority Business Loan Options

SBA Disaster Loans

The SBA offers disaster loans, and for a couple of years, the focus was on providing financial support to businesses hit hard by COVID-19 with the Economic Injury Disaster Loan (EIDL). Those loans are no longer being offered.To qualify for an EIDL loan, you must operate a small business, private non-profit, or agricultural business in the U.S.

Calculating the Total Cost of an SBA Loan

To calculate the total cost of an SBA loan, you’ll need to know the loan amount, the interest rate, and the loan term. You also should take note of any fees, such as loan origination fees, closing fees, and underwriting fees. To get an exact cost of an SBA loan, it’s best to use an SBA loan calculator. However, you can get a general idea of what you’ll pay for an SBA loan by adding up the principal, the total interest charged, and the fees.Recommended: 19 Types of Business Loan Fees

Pros and Cons of Using SBA Loans

SBA loans are a popular option for small business owners due to their competitive interest rates and high borrowing amounts. However, there are also cons to SBA loans, too.Pros of SBA loans include:
  • Competitive interest rates
  • Lower down payment requirements
  • Longer repayment terms
  • Flexible use of funds
  • Guaranteed by the government, making them less risky for lenders
Cons of SBA loans include:
  • Stringent eligibility criteria
  • Lengthy processing and funding times
  • Personal guarantee and/or collateral may be required
  • Fees can be high

Other Financing Options for Your Small Business

Now that you see the typical small business loan rates for SBA loans, you might want to also explore other financing options. Know that the rates you might qualify for with an SBA loan may be better than any other small business loan rates you will find. 

Term Loans

A small business term loan is a lump sum of money given to your business by a lender, such as a bank, credit union, or online lender. Interest rates are typically fixed, which means your monthly payments will remain the same throughout the life of the loan.

Business Lines of Credit

A business line of credit is similar to a credit card in that you have access to a maximum amount of funding that you can use as you please. You only pay interest on what you owe, and can continue making purchases as you pay down the balance.

Equipment Financing

Equipment financing is a small business loan used to purchase business equipment. The equipment serves as collateral, which can sometimes get you a better interest rate. However, if you were to default on the loan, the lender would be able to seize your collateral.

Small Business Grants

Small business grants provide funds you can use to launch or grow your company, but unlike with loans, you don’t typically have to pay them back. 

The Takeaway

SBA loans offer some of the most competitive rates when it comes to small business funding. If you meet the stringent qualifications and don’t need the money immediately, it can be one of the most cost-effective ways to borrow money.However, if you are struggling with poor credit or need the financing sooner, it could be worth exploring other options. If you're curious about what type of business loan you might qualify for, Lantern by SoFi can help. With our online loan comparison tool, you can be matched with a loan offer that meets your company’s needs and qualifications.Explore small business financing.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit (

Frequently Asked Questions

Do SBA loans have higher interest rates?
Why are SBA loan rates so high?
How are SBA rates calculated?
What are the downsides of an SBA loan?

About the Author

Susan Guillory

Susan Guillory

Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.
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