SBA loan rates

As one of the best loans on the marketplace, SBA loans are highly competitive due to their reasonable loan rates. Because most SBA loans have variable interest rates, their loan rates are subject to change every year.

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For 2024, SBA loan rates have substantially increased due to the Federal Reserve raising the benchmark interest rate to lower inflation and manage the economy, with some SBA loans reaching double-digit interest rates. 

Nevertheless, SBA loans have one of the lowest interest rates and can be an excellent source of funding for your business. Read on to learn more about SBA loan rates for 2024. 

Zoe Weisner

Page written by Zoe Weisner. Last reviewed on August 12, 2024. Next review due October 1, 2025.

What are the current SBA loan interest rates?

Before you apply for an SBA loan, you need to check the interest rates, which are subject. Here are the current variable SBA 7(a) loan interest rates as of 2024.

Loan amountLoan term length less than 7 yearsLoan term length over 7 years
$0 to $25,000Prime rate + 4.25%Prime rate + 4.75%
$25,001 to $50,000Prime rate + 3.25%Prime rate + 3.75%
$50,001 or morePrime rate + 2.25%Prime rate + 2.75%

Some lenders will offer fixed-rate 7(a) loans. Below is the current maximum fixed rate.

Loan amountFixed rate medium
$0 to $25,000Prime rate + 8%
$25,001 to $50,000Prime rate + 7%
$50,001 to $250,000Prime rate + 6%
$250,001 or morePrime rate + 5%

It’s important to note that whether your business loan has a variable or fixed interest rate, your SBA loan is subject to review and re-approval every 2, 3, or 5 years. This means that even if you have a fixed rate loan, the bank may charge a higher interest rate during your loan renewal if your prime rate has increased. 

What determines these rates?

SBA loan rates are mostly determined by the type of loan and by the prime rate. There are also other factors, including the loan amount, lender, and term length of the loan. 

According to the Federal Reserve, the prime rate is an interest rate that is set by commercial banks, and changes depending on the Federal Reserve. In addition to the prime rate, there is a lender spread. The lender spread is set by the borrower and the lender, but the SBA sets a limit on the maximum spread.

What are the current fees associated with an SBA loan?

While the SBA does not charge pesky transactional fees such as processing fees, origination fees, and application fees, they do charge fees to cover the cost to service and guarantee an SBA 7(a) loan. Although most lenders will cover the fee that the SBA charges in the event of a default, sometimes a lender may charge it to you. Fortunately, you do not have to pay a guaranty fee if your SBA loan is less than $350,000. 

But if you borrow over $350,000, you will be charged the following fee rates. 

Loan amountUpfront guaranty feeAnnual service fee
$350,001 to $700,0002.77% of guaranteed portion of the loan0.49% of the guaranteed portion of the unpaid balance
$700,001 to $1,000,0003.27% of guaranteed portion of the loan0.49% of the guaranteed portion of the unpaid balance
$1,000,001 or more3.55% of guaranteed portion of the loan0.55% of the guaranteed portion of the unpaid balance

Understand SBA loan rates with experts from Swoop

Understanding SBA loan rates doesn’t have to be complicated. By registering with Swoop, you can discover which SBA loan rate is best for your business by filling out a few questions. With Swoop’s digital platform and lending specialists, you can get help understanding what business loans are available to your business and how loan rates work.

Written by

Zoe Weisner

Zoe is an experienced content marketer and freelance writer. For the past five years, she has written for several high-profile fintech startups such as BlueVine, Fundera, and Nerdwallet to help small business owners navigate through the world of small business financing. Today, Zoe writes about small business finance, business operations, and personal finance.

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