Current SBA Loan Interest Rates (January 2026): 7(a), 504, Microloan + Prime Rate Table

How SBA Loan Interest Rates Work

If you only remember one thing about SBA 7(a) pricing, it’s this: your rate equals a base rate plus a lender spread, and the SBA sets a cap on how high that total can go.

The base rate is typically the Prime Rate, but lenders can also use the SBA Optional Peg Rate. Prime is tied to the federal funds rate set by the Federal Reserve, so when the Fed raises or lowers rates, Prime usually follows within days. The Optional Peg Rate is calculated and published quarterly by the SBA. It’s generally lower than Prime, which can reduce your monthly payment if your lender uses it.

The lender spread is the markup your lender adds to cover their costs and profit. SBA rules limit how much lenders can charge, and those caps depend on your loan size and whether you choose a fixed or variable rate. Larger loans tend to have lower maximum spreads.

The SBA cap is the highest rate you can legally be charged on an SBA 7(a) loan. These caps are published monthly by the SBA and are based on the current Prime Rate. Strong borrowers often qualify for rates below the cap, sometimes by a whole percentage point or more.

Federal Reserve policy matters because changes in the federal funds rate are reflected in Prime within days. When the Fed raises rates to fight inflation, your variable-rate SBA loan payment can increase. When the Fed cuts rates, your payment can drop. Fixed-rate loans lock in a rate for the life of the loan, so you’re protected from future increases but also can’t benefit from rate cuts.

Prime Rate is the benchmark interest rate banks use to price many variable-rate business loans, and SBA 7(a) maximum rates are typically expressed as Prime plus an allowed spread.

SBA Optional Peg Rate is a quarterly benchmark rate published by the SBA that some lenders can use as the base rate for SBA loans instead of Prime. According to the Federal Register, the Optional Peg Rate for the January-March quarter of FY 2026 is 4.50%.

For a broader look at how rates are set across different loan types, check our overview of business loan interest rates.

SBA 7(a) Loan Rates in 2026

The SBA 7(a) loan program is the most common SBA product, and it’s designed for working capital, inventory, equipment, expansion, and refinancing. The 7(a) program offers both fixed and variable rate options, and the rate you’re offered depends on your loan amount, term, and creditworthiness.

The January 2026 cap table above shows the maximum rates the SBA allows, but your goal should be to qualify for a rate below the cap. Borrowers with clean financials, strong debt service coverage ratios (DSCR), and complete documentation often receive offers 0.5% to 1.5% below the published maximum.

Fixed vs. variable trade-offs: Fixed-rate loans offer predictable monthly payments and protect you from future rate increases. Variable-rate loans start with a lower rate but can adjust when the Prime rate changes, so your payment may increase or decrease. If you’re risk-averse or your cash flow is tight, fixed rates provide peace of mind. If you expect rates to fall or plan to pay off the loan quickly, variable rates can save you money.

SBA 7(a) maximum terms vary by use. Working capital loans typically have a maximum term of 10 years. Real estate financing can stretch to 25 years. Equipment financing terms depend on the equipment’s useful life. Longer terms mean lower monthly payments but more total interest paid over the life of the loan.

What rate will I actually get? Lenders look at your personal credit score, business credit profile, cash flow (measured by DSCR), time in business, industry risk, and collateral. A borrower with a 720+ credit score, two years of profitable operations, and a DSCR above 1.5 will qualify for pricing near the bottom of the range. A borrower with a 650 credit score, one year in business, and thin margins will pay closer to the cap.

APR (annual percentage rate) is the yearly cost of borrowing that includes interest and specific fees, making it the best apples-to-apples way to compare lender offers.

The SBA’s published 7(a) rates are maximums; your goal is to secure an offer below the cap by presenting strong cash flow, clean financials, and a complete documentation package. To understand what lenders will expect from you, read our guide to SBA loan requirements.

SBA 504 Loan Rates in 2026

SBA 504 loans are typically used for owner-occupied real estate and heavy equipment and offer long-term fixed rates. The 504 program uses a different structure than 7(a) loans: 50% of the project is funded by a bank or private lender, 40% by a Certified Development Company (CDC) through an SBA-backed debenture, and 10% by the borrower as a down payment.

The CDC portion carries a fixed interest rate that’s set monthly based on the debenture market. The rate quoted as the “504 rate” is an effective rate that includes interest on the debenture and program fees built into the monthly payment. The third-party lender prices the bank portion, which can be fixed or variable, but SBA rules cap it at 6% above the New York Prime rate, as stated in the Federal Register notice.

504 effective rate is the all-in fixed rate on the CDC debenture portion, including program fees built into the monthly payment. The effective rate you see published includes the base debenture rate plus fees amortized over the life of the loan, so it’s higher than the raw debenture rate but represents your actual cost.

With an SBA 504 project, the CDC debenture portion is generally fixed-rate, and the third-party lender portion is legally capped at 6% over the New York Prime rate. This cap protects borrowers from extreme pricing on the bank portion of the loan.

For a deeper dive into 504 program rules and real-world examples, see our comprehensive guide to SBA 504 loans.

SBA Microloan Rates in 2026

Microloans are typically provided through nonprofit intermediaries and can be easier to access for smaller funding needs. SBA Microloan is a small-dollar business loan made by an SBA-approved intermediary (not the SBA directly), typically used for working capital, inventory, or small equipment purchases.

Microloan interest rates vary by intermediary lender and borrower profile. The SBA provides low-cost capital to intermediary organizations, which then lend to small businesses at rates they set based on their own cost of funds and risk assessments. Rates typically range from 8% to 13%, though some borrowers with strong credit and established businesses may qualify for lower pricing.

Microloans are commonly used for starter inventory, small equipment purchases, and working capital needs of up to $50,000. The maximum microloan amount is $50,000, and the average loan size is much smaller. Terms vary by lender but generally range from one to six years.

A microloan can be strategically smarter than a capped 7(a) small loan when you need a small amount and want longer repayment than many online lenders offer. Microloans also tend to have more flexible underwriting than traditional bank loans, which can help newer businesses or borrowers with less-than-perfect credit.

SBA microloan rates vary by intermediary, so the best way to know your rate is to compare offers, but microloans can be a strong fit when you need a smaller amount and want more extended repayment than many online lenders offer.

For full details on how microloans work and how to apply, visit our guide to SBA microloans.

SBA Loan Fees in 2026

Two loans with the same interest rate can have different total costs due to differing fees. Understanding fees is key to accurately comparing lender offers.

SBA loans include both SBA-related fees and lender fees. The SBA charges a guarantee fee based on the loan amount and term. This fee is a one-time charge that can be financed into the loan, so you don’t need to pay it out of pocket. Lenders charge origination fees, packaging fees, and, in some cases, ongoing servicing fees. These costs vary widely by lender, and they can add thousands of dollars to the total cost of your loan.

A loan fee breakdown is an itemized list of all upfront and ongoing costs, so you can estimate APR and compare lenders based on total cost, not marketing claims.

Always compare SBA loan offers using APR and an itemized fee breakdown, not just the interest rate cap table. Two lenders can offer the same interest rate but charge vastly different fees, which means the lower-rate offer might actually cost you more over the life of the loan.

APR includes the interest rate plus specific fees, expressed as an annual percentage, making it the most straightforward way to compare offers. When you request a loan quote, ask the lender to provide the APR in writing. If they hesitate or only want to talk about the interest rate, that’s a red flag.

When comparing offers, request an itemized fee worksheet and APR estimate in writing from every lender. Ask whether fees are financed into the loan or paid out of pocket. Compare the total amount financed, the monthly payment, and the total interest paid over the life of the loan. That’s the only way to know which offer is truly the lowest cost.

One common SBA form you’ll encounter is SBA Form 413, which collects personal financial information from guarantors.

Real-World Comparisons for SBA vs Bank vs Online Lenders

SBA is often the lowest-cost option, but it’s not always the fastest, and not every use case fits SBA rules. Your decision should be based on your funding timeline, use of proceeds, and the relative importance of total cost versus speed.

SBA 7(a) loans offer the lowest long-term cost for most uses but require significant documentation and take 45 to 90 days to close. Best for borrowers who can wait and want the lowest APR.

SBA 504 loans offer the lowest fixed-rate financing for real estate and heavy equipment but have longer closing timelines (60 to 120 days) and require the property to be owner-occupied. Best for real estate purchases where you plan to occupy at least 51% of the space.

SBA Microloans are the most accessible for smaller amounts and newer businesses, with flexible underwriting and reasonable rates (typically 8% to 13%). Best for borrowers who need less than $50,000 and don’t qualify for traditional bank financing.

Bank term loans (non-SBA) can close faster than SBA loans but typically require stronger credit and larger down payments. Rates are often 1% to 2% higher than SBA rates. Best for borrowers who need speed and have strong credit.

Online term loans fund in one to seven days but charge significantly higher rates (often 12% to 30% APR). Best for urgent needs when waiting for SBA approval isn’t an option.

Business lines of credit provide flexible access to capital and only charge interest on what you draw, but rates are typically higher than term loans. Best for managing cash flow gaps and seasonal needs.

A working capital loan is financing used to cover day-to-day business expenses, such as payroll, inventory, and operating costs.

If you need the lowest long-term cost and can wait for underwriting, compare SBA first; if speed is most important, compare online term loans and lines of credit, but expect higher APRs.

United Capital Source helps you compare multiple lender options through a single intake process, saving you time and improving your chances of getting the best rate. Instead of applying to five lenders individually, you complete one application and receive multiple offers you can compare side by side. To explore flexible working capital options, see our overview of line of credit rates.

Specific SBA Scenarios

Not every preference is fully compatible with SBA rules. Here’s the closest match and the best alternatives.

E-Commerce Store Scenario

If you’ve operated an e-commerce store for two years and need $100,000 for marketing and inventory, and you prefer fixed monthly payments with minimal collateral, here’s what to compare. For a $100,000 loan with fixed monthly payments, the most common products to compare in 2026 are SBA 7(a) term loans, bank term loans, and online term loans, then choose based on total APR, fees, and funding speed.

SBA 7(a) fixed-rate loan: This will likely offer the lowest long-term cost (around 9% to 10% APR for strong borrowers), but SBA rules typically require a personal guarantee and may file liens on available business assets. True “no collateral” SBA loans are rare. The SBA doesn’t require you to pledge your home if you have other business assets, but expect a blanket lien on business assets and a personal guarantee. Timeline is 45 to 90 days.

Bank term loan: Rates will be 1% to 2% higher than SBA (around 10% to 12% APR), and you’ll still face personal guarantee and collateral requirements. Speed is faster (two to six weeks), and approval may be simpler if you have two years of profitable operations and strong bank statements.

Online term loan: Funding can occur in 1 to 7 days, and APRs typically range from 15% to 25%. Collateral requirements usually include a UCC lien on business assets and a personal guarantee. This option makes sense if you need money immediately and plan to refinance once you have time to pursue SBA or bank financing.

Documents lenders usually require: Two years of business bank statements, two years of business tax returns (if filed), personal tax returns for all guarantors, year-to-date profit and loss statement and balance sheet, business formation documents (articles of incorporation or LLC operating agreement), government-issued ID for all owners with 20%+ ownership, and a clear written explanation of how you’ll use the funds. When evaluating marketing spend, lenders may request a marketing plan or budget. For inventory, they may request supplier invoices or purchase orders.

Preparing a strong business plan can improve your odds of approval and pricing, especially if your use of funds includes growth initiatives such as marketing.

Local Service Business Scenario

If you run a local service business with four employees, about $25,000 in monthly revenue, and need $50,000 for inventory and payroll during a busy season, here’s what to compare.

SBA Microloan: If your need is truly short-term (under one year), a microloan may not be the best fit, as most intermediaries expect you to use the funds for growth, not seasonal cash flow. But if you’re buying inventory that will generate revenue over multiple seasons, a microloan at 8% to 12% over a three- to five-year term can work well. Approval timeline is two to six weeks.

SBA 7(a) small loan or SBA Express: For $50,000, you’d fall into the higher-cap loan band (Prime + 4.25%), which means a maximum rate around 11% in January 2026. If you have solid credit and two years of operations, you might qualify for Prime + 3% to 3.5% (around 9.75% to 10.25%). Timeline is four to eight weeks for standard 7(a) or two to four weeks for SBA Express.

Business line of credit: This is often the best structure for seasonal cash flow needs because you only draw what you need and only pay interest on the drawn balance. Rates typically range from 10% to 20% APR, depending on your credit. Speed is one to four weeks, and you can reuse the line as you pay it down.

Documents lenders usually require: Business bank statements (typically six to twelve months), business tax returns (one to two years), personal tax returns for guarantors, year-to-date financial statements, formation documents, ID, and a clear explanation of your seasonal revenue cycle and why you need the funds. Lenders will want to see that your busy season generates enough revenue to cover the payroll you’re financing.

A personal guarantee is a promise that the business owner will repay the loan personally if the business can’t, which is common in SBA and many small-business loans.

How to Apply for an SBA Loan:

Once you’ve prepared your documents, you can select an SBA lender and begin the application process. United Capital Source can help you apply to an SBA-approved lender following these steps.

Step 1: Ensure You Qualify

You’ll need a credit score between 650 and 700, as well as a healthy and consistent cash flow. How you intend to use the money plays a significant role as well. You’ll need a detailed plan of how the funds will help you invest in and grow the business.

Step 2: Gather Your Documents

Be prepared to provide the documents listed in the previous section. Our loan experts can help you if you need more guidance. You should also include the UCS one-page application.

Step 3: Fill Out the Application

You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to enter the information from the previous section along with your desired funding amount.

Step 4: Speak to a Representative

Once you apply, a representative will reach out to you to explain the repayment structure, rates, and terms of your available options. This way, you won’t have to worry about any surprises or hidden fees during repayment.

Step 5: Receive Approval

SBA Loans through our network generally take 4-12 weeks to process. Once approved and your file is closed, funds should appear in your bank account in a few business days.

DSCR (debt service coverage ratio) measures how comfortably your business cash flow covers loan payments; a higher DSCR typically improves approval odds and pricing.

Most lenders will ask for recent business bank statements, business and personal tax returns, year-to-date financials, and a clear use-of-proceeds explanation when you apply for an SBA loan.

One of the most important financial documents you’ll prepare is your profit and loss statement, which shows lenders your revenue and expense trends.

How to Get a Better SBA Rate in 2026

The SBA cap is not your rate; it’s the maximum. Here’s how borrowers get offers under the cap.

Five levers most affect your pricing. Credit score: Personal credit scores above 720 typically unlock the best pricing. Scores between 680 and 720 still qualify but may incur a 0.25% to 0.5% premium. Scores below 680 often face higher spreads or denials. DSCR and cash flow: Lenders typically require a DSCR of at least 1.25, meaning your cash flow covers your debt payments by 25%. A DSCR above 1.5 puts you in the best pricing tier. Time in business: Two or more years of operations with consistent revenue gives you the strongest negotiating position. Startups and businesses under two years old face higher spreads or require larger down payments. Collateral: Offering real estate or equipment as collateral can reduce your rate by 0.25% to 0.5%. Unsecured loans (or loans secured only by a blanket business lien) carry higher interest rates. Down payment or equity injection: Making a 15%-20% down payment instead of the minimum 10% shows lenders you have skin in the game and can reduce your spread.

Lender spread is the markup a lender adds to the base rate to determine your final interest rate, within SBA rules.

Use this negotiation checklist to improve your offer. Request a reduced spread: If you have strong credit and cash flow, ask the lender, “Can you reduce the spread by 0.5%? I’m comparing three offers, and yours is competitive, but I’d like to bring the rate down.” Many lenders have flexibility. Ask about packaging fee limits: Some lenders charge 2%-3% packaging fees. Ask if that can be reduced to 1% or waived for strong borrowers. Compare at least three offers: Competition drives better pricing. Tell lenders you’re shopping, and they’ll often sharpen their pencil. Ask what triggers a rate discount: Some lenders offer better pricing if you set up autopay, maintain a deposit account with them, or agree to a relationship with their business banking services.

The fastest way to improve your SBA rate is to present lender-ready financials and compare multiple offers, as lenders often price below the SBA maximum for strong borrowers.

Your business credit score also plays a role in pricing, so monitoring and improving it can pay off over time.

Monthly Update Methodology and Update Log

Last updated: January 15, 2026

Next scheduled update: February 5, 2026

This SBA rate tracker is updated monthly using Federal Reserve benchmark rates and the SBA’s published rate resources. We pull the Bank Prime Loan Rate from the Federal Reserve’s H.15 Selected Interest Rates report, which is updated daily. We pull the SBA Optional Peg Rate from the Federal Register, which publishes it quarterly. We monitor SBA FTA resources for monthly 7(a) maximum rate postings.

What triggers changes? Federal Reserve policy meetings can move the federal funds rate, which flows into Prime within days. The SBA updates the Optional Peg Rate quarterly, and the changes are published in the Federal Register. SBA 7(a) maximum rates are adjusted monthly based on the current Prime Rate. SBA 504 debenture rates change monthly based on treasury market conditions.

What changed this month? As of January 13, 2026, Prime remains at 6.75%, unchanged from December 2025. The Optional Peg Rate was updated to 4.50% for the January-March quarter, down from 4.75% in the prior quarter. SBA 7(a) maximum rate caps reflect the current 6.75% Prime Rate.

Last updated is the date on which this page’s base rates and SBA tables were refreshed, using the sources listed below.

For a list of trusted lenders who can help you navigate these rates, see our directory of the best SBA lenders in 2026.

Frequently Asked Questions

What are the current SBA loan rates in 2026?

Current SBA loan rates in 2026 depend on the program. SBA 7(a) loans are typically priced at Prime plus a capped spread, SBA 504 loans are generally fixed-rate, and Microloan rates vary by intermediary. Use the rate tables in this article to see the current benchmarks and caps for the month.

What is the Prime Rate right now and why does it matter for SBA loans?

As of January 15, 2026, the Bank Prime Loan Rate is 6.75%, and SBA 7(a) maximum rates are commonly calculated as Prime plus an allowed spread. Because many SBA 7(a) loans use Prime as the base rate, Prime changes can raise or lower your variable-rate payment. When the Federal Reserve adjusts the federal funds rate, Prime typically follows within days.

Are SBA loan rates fixed or variable?

SBA loans can be fixed or variable, depending on the program and lender, but SBA 504 loans are commonly fixed-rate, and many SBA 7(a) loans are variable-rate because they’re tied to Prime. If you want predictable budgeting, compare fixed-payment options and confirm whether the rate can change. Fixed rates protect you from future increases but don’t benefit from rate cuts. Variable rates can save money if rates fall, but increase your payment if rates rise.

How can I compare SBA loan offers from different lenders?

Compare SBA loan offers using APR and a written, itemized fee breakdown, then evaluate payment amount, term length, and any prepayment penalties. Request the fee checklist from every lender and compare the total amount financed, monthly payment, and total interest paid over the life of the loan. Don’t rely on the interest rate alone; fees can vary widely and significantly affect the total cost.

Can I get an SBA loan with fixed monthly payments for inventory and marketing?

Yes, many borrowers use term-loan style financing for inventory and growth expenses, and you should compare SBA 7(a) term loans, bank term loans, and online term loans to find the best fixed-payment option. SBA 7(a) loans can be structured as fixed-rate loans, which provide predictable monthly payments. Be prepared for SBA rules around personal guarantees and collateral, and understand that “no collateral” often means no lien on your home but still a blanket lien on business assets.

Do SBA loans require collateral or a personal guarantee?

Many SBA loans require a personal guarantee, and lenders may take collateral when it’s available, so it’s essential to ask precisely what liens and guarantees are required before you accept an offer. SBA rules don’t require you to pledge your home if adequate business assets are available, but they do require a UCC filing on business assets and a personal guarantee from all owners with 20% or more ownership. If avoiding collateral is a priority, consider non-SBA options such as unsecured online term loans, but expect much higher interest rates.

What documents do lenders usually require for a small business loan?

Most lenders ask for business bank statements, business and personal tax returns, year-to-date financial statements, formation documents, and a clear explanation of how you’ll use the funds. Having these ready typically speeds up underwriting and can improve pricing. Missing documents are one of the most common reasons applications stall during underwriting.

How often do SBA loan rates change?

SBA 7(a) variable-rate pricing can change when the base rate (e.g., Prime) shifts, and the SBA also publishes rate guidance on a regular schedule, so it’s prudent to check rates monthly. Prime can change any time the Federal Reserve adjusts the federal funds rate. The SBA Optional Peg Rate is updated quarterly. SBA 504 debenture rates change monthly based on the treasury markets.

Current SBA Loan Interest Rates (January 2026) – Final Thoughts

Understanding current SBA loan interest rates in 2026 means knowing the base rates (Prime and Optional Peg), understanding the SBA caps, and comparing total costs using APR and itemized fees. SBA 7(a) loans offer the lowest long-term cost for most business uses but require strong documentation and patience. SBA 504 loans provide fixed-rate financing for real estate and equipment with longer terms. Microloans serve smaller needs with flexible underwriting.

Your rate depends on your creditworthiness, cash flow, time in business, and the strength of your application. The strongest borrowers qualify for pricing well below the SBA caps, sometimes by a full percentage point or more. Comparing multiple offers is the fastest way to ensure you’re getting the best rate available.

United Capital Source can help you compare SBA and non-SBA options side by side, package your documents, and receive multiple offers so you can choose the lowest total cost, not just the lowest advertised rate. Instead of spending weeks applying to various lenders individually, you complete one intake and receive multiple competitive offers. That means you save time and improve your negotiating position. If you’re not ready to apply, download our lender document checklist to begin preparing your file.

References

1. Federal Register – Interest Rates (SBA Optional Peg Rate for January-March FY 2026 quarter and 504 third-party lender cap)
2. SBA FTA Downloads and Resources (Monthly SBA 7(a) maximum rate postings and update schedule)
3. SBA FTA Wiki (Official SBA rate guidance and base-rate references for 7(a) loans)
4. Federal Reserve H.15 – Selected Interest Rates (Bank Prime Loan Rate as of January 13, 2026)
5. Federal Reserve Supervision and Regulation Report (General context on rising interest rates and lending conditions)