SBA Loan Rates 2023: All The Facts

The current SBA loan interest rates are about as competitive as your going to get. The Small Business Administration wants you to succeed and if you want to start a small business and need a small business loan the SBA loan program is an opportunity not to be missed. 

Current SBA 7(a) Loan Interest Rates for 2023 

• SBA 7(a) fixed rates - Varies based on lender; cannot exceed the SBA’s cap.
• SBA 7(a) variable rates - Prime rate plus 2,25%, 2.75%, 3.25, 3.75%, 4.25, or 4.75%, depending on your loan amount and repayment time.
• SBA Express loan rates - 4.5% – 6.5% above the prime rate.
• SBA CDC/504 loan rates - About 4.5% - 4.63%.
• SBA Microloan rates - 8% - 13%.
• SBA Economic Injury Disaster Loan (EIDL) rates - Businesses get a 3.75% fixed rate, and private nonprofit organizations get a 2.75% fixed rate.
• SBA Disaster Loan rates - 3% for businesses, 2% for nonprofits, and 1.25% for homeowners.

SBA 7(A) Loan Rates Explained

SBA 7(a) loans encompasses a few different loan types that come with different amount options and help fund different expenses. You may wish to explore what is an SBA 7a loan  for a deeper understanding. Standard 7(a) loans, for example, are the general 7(a) loans that offer funding up to $5 million. On the other hand, 7(a) Small loans, as the name implies, are a smaller version of the standard 7(a) with loans amounts of up to $350,000.  

There are also Express loans, which are fast-turnaround loans - typically about 36 hours - that come with loan amounts up to $500,000. And if you thought the Express loan wasn’t fast enough, the Export Express loan is even faster, with a turnaround time of 24 hours. 

Rate options: SBA 7(a) loans come with either fixed or variable interest rates. A fixed interest rate is exactly like it sounds, it’ll stay the same over the life of your loan. On the other hand, variable rates are set each day by the daily prime rate in combination with additional interest potentially charged by a lender. 

SBA 7(a) loan fees: SBA loans are popular because they charge fewer fees than traditional loans tend to. SBA 7(a) loans come with what’s known as a guaranty fee. These fees, typically around 2% - 3%, will vary depending on the size of the loan you take out. This 2% - 3% fee is only on the guaranteed part of your loan. In other words, you’ll only pay a fee on the portion of your loan that the company is guaranteed to get in the event that you default on it (85% is common). So, if you take out a $200,000 loan, but the lender is guaranteed to get $175,000 back from the SBA if you default, your fee will only be based on the $175,000.  

Repayment terms: 10-25 years. 

SBA Express Rates - Overview

An SBA Express loan offers loans of up to $1 million with repayment periods of up to 10 years. There’s also an option to take out an SBA Express line of credit so you can draw on it as needed, rather than taking out a large lump sum loan. 

SBA Express loans are a part of the 7(a) program, so while an Express loan is always a 7(a) loan, a 7(a) loan isn’t always an Express loan. The Express loan is meant to be an expedited loan that you can secure within 36 hours. 

Rate options: Like all 7(a) loans, you can find both fixed and variable loans. Each type of interest rate will be decided by the specific lender you choose, but they tend to average between 4.5% - 6.5%.

SBA Express loan fees: SBA Express loans, like SBA 7(a) loans, come with guaranty fees - the same ones, in fact. In addition, the specific lender you choose may also charge additional fees, or the SBA themselves might charge additional fees if you opt to apply directly through them.

Repayment terms: Up to 25 years. 

SBA Loan Rates on Real CDC/504 Loans - Overview

A CDC/504 loan is a long-term loan that offers up to $5 million in funding for businesses looking to help their businesses grow. They’re available through SBA partners - Certified Development Companies (CDCs) - that can help you apply for the loan.  

You can use a 504 loan for a few different purposes, including keeping up existing buildings or land, building new facilities, and maintaining machinery and equipment. 

Rate options: Your options will depend on whether you want a 10- or 20-year loan. 20-year rates will be slightly lower, at about 4.51%, while 10-year term loans are about 4.63%.

Real CDC/504 loan fees: As well as additional fees set by the specific lender you use, you’ll also likely pay a guarantee fee of 0.5%. 

Repayment: 10 or 20 years. 

SBA Microloan Interest Rates - Overview

Microloans are smaller business loans of no more than $50,000. While these loans can be used for almost anything, the SBA suggests you focus on small repairs or improvements that can help your business grow. This can include new supplies, equipment, or furniture that help you conduct business. To discover more about microloans you can look into the SBA Microloan Program.

Rate options: The rate you’ll receive will depend on the lender you choose. 8%-13% but this rate can change and it is advisable to check current rates. Each lender varies based on how much it costs them to issue you the loan. 

SBA Microloan loan fees: SBA Microloans come with a fee of anywhere between 2%-3% of the amount of the loan. That means a $40,000 loan comes with a 2% fee of $800. That’s not a small amount of money, so make sure you consider a number of different lenders before making a final decision. 

Repayment terms: 6 years, maximum. 

SBA EIDL Rates - Overview

The SBA EIDL, also known as the COVID-19 Economic Injury Disaster Loan provided funding for businesses during COVID-19 so they could stay open and keep their staff employed. The program has since closed, but those who received these loans can still request increases and appeals. 

Rate options: Your interest rate will depend on the type of business you run and the lender you choose. For businesses, there’s a 3.75% fixed rate. Nonprofits, on the other hand, pay just 2.75%. 

SBA EIDL fees: If you have a loan that’s $25,000 or less, you won’t have any fees if you applied directly through the SBA. Loans over $250,000 paid a $100 fee, plus any other fees required by the specific lender. Larger loans came with light higher fees. Those who took out $500,000 or more also paid a one-time $100 fee, but they also had to pay any additional fees required by their lender. 

Repayment terms: 30 years. 

SBA Disaster Loan Rates - Overview

SBA Disaster loans are there to help businesses that have been through a natural disaster. They can help you rebuild or replace any equipment that was damaged during the disaster. This loan can help you make up the difference between any financing you get from your insurance company or other loans. 

Disaster loans cover a variety of events. Physical damage loans, for example, will help cover a rebuild of your physical property. Mitigation assistance can help you rebuild as well, but these loans can also help you make improvements to your home that can protect your home in the future. Stronger roof protection, for example. 

Rate options: With most SBA Disaster loans, you’ll get a fixed interest rate of no more than 4%. Depending on the type of disaster loan you take out, you may be eligible for a lower interest rate if your business is a registered nonprofit. 

SBA Disaster loan fees: While fees will largely be determined by the lender you go with, SBA Disaster loans don’t come with any upfront fees charged by the SBA. 

Repayment terms: 30 years.  

The Last Word

SBA loan rates are largely determined by the SBA lender you’re getting the loan through. The Small Business Administration does put a cap on interest rates, however, so they can ensure business owners can keep loan costs low. The best way to ensure you’re getting the loan you really need is to shop around and find a lender that checks most of the boxes.