What an SBA loan costs today
Your rate is Prime plus your lender's margin. Prime today, with its date, and the most a lender can add on top.
- Base rate
- Bank Prime Loan Rate
- Unchanged since
- Before that
- 7.00%
- Source
- FRED, series DPRIME, from the Federal Reserve H.15 release
- Caps confirmed
- against SOP 50 10 8
SBA 7(a) loans price off the Prime rate, which is 6.75% today. Your lender adds a margin on top, and the SBA caps how large that margin can be by loan size. Most lenders price below the cap. Ask yours for their margin before you compare anything else.
The most your lender can add
Bigger loans carry smaller caps. A lender can go lower and often does, so read the last column as the worst case rather than as an offer.
| Loan size | Prime | Most a lender can add | Worst case |
|---|---|---|---|
| Up to $50,000 | 6.75% | + 6.50 | 13.25% |
| $50,001 to $250,000 | 6.75% | + 6.00 | 12.75% |
| $250,001 to $350,000 | 6.75% | + 4.50 | 11.25% |
| Above $350,000 | 6.75% | + 3.00 | 9.75% |
What these numbers are
The rate caps shown are the most a lender may charge on a variable-rate 7(a) loan under SBA rules. They are not quotes and they are not offers of credit. A lender sets your rate within the cap, and many loans price below it. The Prime rate shown is a published observation carrying the date it was read, and it moves.
The median margin lenders charged over the last year, by loan size: Under $350k plus 3.00, $350k to $1m plus 2.50, $1m to $2m plus 2.00, $2m to $5m plus 1.75, Over $5m plus 1.25. From SBA loan records through .
What to ask your lender
- Their margin over Prime for a loan your size, in writing.
- Which Prime they use. Most notes name a daily financial newspaper.
- Whether the rate adjusts monthly or quarterly.
- The guaranty fee, and whether it gets financed into the loan.
A quarter point on a two million dollar loan runs about five thousand dollars a year. Worth one phone call to a second lender.
When this page changes
We pull Prime from the Federal Reserve every day, and the date above is when we last read it. Prime moves when the largest banks move it, which normally follows a change in the federal funds target. The caps move only when the SBA revises them.
Fed funds and Treasuries today
Prime follows the federal funds target. Fixed-rate offers price off Treasury yields. If your lender quotes a fixed rate, these are the figures behind it. The arrow is the move from the previous observation.
- Prime 6.75% Read
- Fed funds 3.63% Read
- 5-yr Treasury 4.40% Read
- 10-yr Treasury 4.69% Read
Source FRED, from the Federal Reserve H.15 release
Before you call the lender
- How is the cap computed?
- Prime plus a spread the SBA sets by loan size, under 13 CFR 120.213 through 120.215. Add the two numbers in the table and you have the ceiling for your size.
- Will my rate be the cap?
- Most lenders price under it. Where you land depends on credit, collateral, the deal, and the lender, which is why the margin question belongs in writing.
- What moves Prime?
- The federal funds target. When the Federal Reserve moves it, the largest banks reprice Prime within days, and variable-rate 7(a) loans follow at their next reset.
- Can I get a fixed rate instead?
- Fixed-rate 7(a) loans exist and carry their own SBA caps. Ask early whether your lender writes them for loans your size.