SBA 7a loan Small Business Administration agreement. concept: SBA Loan Rates
Max Cordova
By: max
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Average SBA Loan Rates

Do you own a small business? Are you looking to get funding to grow your business? 

You’re not alone. There are tons of business owners that know that the best way to invest and grow is a small business loan. And there are lenders out there that will be willing to work with you. 

However, because there are so many options available, it can be overwhelming when it comes to deciding who to trust when getting your loan or what type of loan you should get altogether.

While getting a loan is not necessarily difficult, it’s helpful to have some direction when the time comes to inquire about a loan. And, one loan you may consider looking into is an SBA loan, otherwise known as a U.S. Small Business Association 504 Loan. 

What’s unique about this loan is that the government/SBA does not issue it directly. Instead, the SBA works with a lending institution directly so that the institution can then disperse the loan to their customers. In other words, an SBA loan is partially funded by the U.S. government, which eliminates some of the risks for the financial institution that administers it. 

Vector illustration of powerful investor giving money supporting businessman in future development. concept: SBA Loan Rates

If you’re interested in learning more about SBA loans, one question you may have is about SBA loan rates, and whether or not those rates would make this loan an excellent choice. Today, we’ll talk about SBA loan rates and why they make SBA loans stand out from the rest. Let’s get into it.

Why are SBA loans so affordable? 

The rate on a small business loan can be a huge deciding factor for many small business owners. So, if you’re looking for an affordable loan, SBA loan rates might surprise you (in a positive way). Because the government partially funds SBA loans, the Small Business Association sets guidelines on these loan rates, which keep lenders in check, according to Nerd Wallet.

SBA loan rates are determined by following the daily prime rate plus the lender spread (the difference), which can be negotiated by the lender and the client. However, this lender spread has a maximum cap on it, based on the size and maturity of the loan itself. Because of these regulations, there’s only a certain amount that lenders can charge, resulting in SBA loans being some of the lowest of their kind on the market.

However, it’s essential to keep in mind that because these loans are so affordable, many people apply for them, which makes them very competitive. 

If an SBA loan is something you’re interested in applying for, then put some time aside to prepare what you need to apply and fill out the application. 

SBA loan rates

SBA loans sure do sound intriguing. You now know that SBA loans are competitive due to their affordability, but how low actually are the SBA loan rates? 

Knowing more specific information on SBA loan rates can help you accurately compare this loan to others, especially if you do not qualify and need to seek out another loan that has similar rates. 

Concept idea of FED, federal reserve system is the central banking system of the united states of America and change interest rates. Percentage icon and arrow symbol on wooden cube. concept: SBA loan rates

According to, the going rate for SBA loans as of September 2019 were:

  • SBA 7(a) loan rates: 7.25% to 9.75%
  • SBA Express loan rates: 9.50% to 11.50%
  • CDC portion of CDC/504 loan rates: 3.76% to 5.29%
  • SBA microloan rates: 6.5% to 13%

Understand that these rates are based on the prime rate markup, so it can change. 

Which loan you apply for will depend on various factors, like how much you need and what you are using the loan for. For instance, an SBA7(a) loan is the SBA’s flagship loan and is generally used for working capital, expansion, and equipment, and are up to $5 million. 

Your rate can depend on whether or not you will pay it off in less than 7 years or more than 7 years. 

Who can get an SBA loan?

Now that you know SBA loans are an attractive choice due to low SBA loan rates, you’re probably wondering whether or not you’d be eligible to receive an SBA loan for your small business. 

You need to find the SBA loan that is right for you. Once you find it, you will have to go through a rigorous application process to be considered for this loan.

First and foremost, you must:

  • Be a for-profit business
  • Have your business located and operating in the U.S. and/or its territories
  • Have invested some equity already
  • Not have financing from another lender

Typically, lenders who give SBA loans require their applicants to:

  • Have 2+ years of business experience
  • A credit score of at least 640
  • $100,000 in annual revenue for the business.

SBA loan form on a table. concept: SBA loan rates

According to Forbes, just because you have met these credentials doesn’t necessarily mean you’ll get approved for an SBA loan. Likewise, if you don’t meet these criteria, there’s a chance you can still be approved if you have a solid business plan and cash flow. 

SBA loan rates: the holy grail of loans?

The competitive loan rates that come with SBA loans make this loan a desirable option for small businesses who need something affordable. But that doesn’t mean that they offer the only low rates in the market.

If you are a small business who wants a loan with a low rate from a lender you can trust, then look no further. At Camino Financial, we can walk you through the process of getting the loan that best fits your needs. 

Request a quote for a business loan today to learn more!

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