Current SBA Loan Rates 2022 – Forbes Advisor – Forbes | Region & Cash

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US Small Business Administration (SBA) loans can be a great way for startups and other small business owners to access affordable financing. While the application process is often lengthy and competitive, SBA loans offer lower interest rates than many other forms of business financing.

These are the SBA loan rates to know before applying for financing:

Estimated SBA loan rates as of July 2022

SBA loan rates vary based on a number of factors, including the loan program, amount, and term. Most SBA rates are also tied to the prime, treasury, or other base rate, with maximum rates set at a specified amount above that base. Depending on the lending program, interest rates may be fixed or variable, and interest rates may be negotiated between the lender and borrower or set by the SBA. Because of this, the best small business loans vary by borrower and loan type.

SBA 7(a) Tariffs

The SBA 7(a) program offers multiple loan options of up to $5 million with terms of up to 25 years. Funds can be used to cover working capital, equipment purchases and business expansion costs. Loans can be granted with both variable and fixed interest rates. Note that variable interest rates may vary based on publicly available base rates and require SBA approval.

Individual SBA-approved lenders can set interest rates, but must comply with the maximum rates set by the SBA. For example, an SBA 7(a) loan interest rate cannot exceed a certain percentage above a standard base rate — such as the federal funds rate (4.75% as of July 2022).

SBA 7(a) Variable Interest Rates

SBA loan rates as of July 2022

SBA 7(a) Fixed Interest

SBA loan rates as of July 2022

SBA Express Loan Rates

An express loan is a type of 7(a) loan that offers borrowers faster approval times than other SBA loans — 24 to 36 hours. Loans of up to $500,000 are available with maximum terms of seven to 25 years, depending on the type of financing.

As with other 7(a) loans, the lender and borrower negotiate the interest rate, but interest rates generally depend on the loan amount and cannot exceed the maximum amount set by the SBA.

SBA loan rates as of July 2022

CDC/504 Lending Rates

Offered by Certified Development Companies (CDCs), SBA 504 loans can be used to support business growth and job creation—for example, through the purchase of land, buildings, or major equipment—with loan amounts of up to $5 million . However, borrowed funds cannot be used to purchase inventory, refinance or pay off debt, or invest in real estate; Likewise, 504 loans cannot be used as a source of working capital.

Borrowers can choose between 10- and 20-year terms, with the asset-backed loan being funded and personally guaranteed by the borrower. CDC/504 loan funding comes from a CDC (40%), a bank or credit union (50%), and the borrower (10%). Interest rates are fixed for the life of the loan and tied to current five- and ten-year US Treasury interest rates.

Estimated SBA loan rates as of July 2022

SBA Micro Loan Rates

The SBA microcredit program allows small business owners to borrow up to $50,000 to help meet start-up and expansion costs. However, the average microloan is much smaller – just $13,000. Repayment periods can be as long as six years, but ultimately depend on the loan size, intended use, and lender-specific requirements.

As with many other SBA loans, interest rates depend on the individual lender, but typically range from 8% to 13%. Also, many SBA microloans are secured by the asset being financed or other collateral, and the borrower must personally vouch for the loan amount.

SBA loan rates as of July 2022

EIDL (Economic Injury Disaster Loan) interest rates.

Economic injury disaster loans (EIDLs) are a type of SBA funding that provides loans up to $2 million. Unlike other SBA loans, EIDLs are not limited to small businesses, but require borrowers to demonstrate significant, ongoing economic damage from a declared disaster. Loan terms can be up to 30 years and interest rates cannot exceed 4%.

EIDL rates from July 2022

Find the best small business loans of 2022

Frequently Asked Questions (FAQs)

How is SBA loan interest calculated?

In general, SBA loan rates are calculated based on several factors, including the loan program and base rates such as the federal funds rate and Treasury rates. However, SBA loan rates also depend on the loan size, the borrower’s creditworthiness, the lender’s unique requirements, and whether the rates are fixed or variable.

Borrowers attempting to obtain a business loan should compare all applicable loan programs and individual loan offers when selecting an SBA loan.

Do SBA loans have fixed interest rates?

Some SBA loans have fixed interest rates, while others come with the option of fixed or variable interest rates — or a combination of both. For example, all loans available through the EIDL program have a fixed interest rate of 2.75% or 3.75% depending on whether the borrower is a for-profit business. SBA 7(a) loans, on the other hand, can have a fixed or variable rate—with variable rates requiring express SBA approval.

What is the maximum SBA loan interest rate?

The maximum SBA loan interest rate varies by loan program and loan amount, but the highest rate currently set by the SBA is for SBA 7(a) fixed rate loans up to $25,000. Similarly, the SBA Express Loan Program offers a maximum interest rate of 10% for loans up to $50,000 and 8% for loans over $50,000 (based on a base rate of 3.50%). Other SBA loan programs have lower maximum rates, such as B. 504 loan rates that vary based on current five- and ten-year US Treasury interest rates.

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