What are SBA loan interest rates?

SBA loan interest rates are the percentages lenders can charge borrowers for financing through SBA loan programs. Rates vary by loan type, loan amount, term, and whether the rate is fixed or variable.

What changed this month?

  • The Prime rate (Wall Street Journal) remains unchanged from May at 6.75% . The FOMC held the federal funds target at 3.50%-3.75% on June 17, the fourth consecutive hold.
  • SBA 7(a) rate maximums remain unchanged.
  • Treasury yields continue to drift higher. The 10-year rose to 4.44% and the 5-year rose 6 basis points to 4.19% as of June 30, 2026.
  • SOFR rates ticked up to 3.68% as of June 30, 2026.
  • The SBA Optional Peg Rate increased from 4.50% to 4.75% for Q3 2026, effective July 1.
  • SBA 504 loan effective rates rose this month, with 10-year moving to 6.19%, 20-year to 6.20%, and 25-year to 6.17%.
  • SBA loan rates continue to reflect higher benchmark rates relative to historic lows.

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Quick summary.

  • SBA 7(a) interest rates are calculated using a Base Rate + a lender markup. Lenders can choose from five different base rates.
    • WSJ Prime Rate: 6.75% (Most common)
    • SBA Optional Peg Rate: 4.75% (as of June 30, 2026)
    • 30-Day SOFR (Secured Overnight Funding Rate): 3.68% as of June 30, 2026.
    • 5-Year Treasury Note Rate: 4.19% as of June 30, 2026.
    • 10-Year Treasury Note Rate: 4.44% as of June 30, 2026.
  • SBA 7(a) rate maximums span 9.75% to 14.75% depending on loan size and term.
  • SBA 504 rates span 6.17% to 6.20% in July 2026 across 10-, 20-, and 25-year terms, fixed for the life of loan.

SBA 7(a) loan interest rate table - July 2026.

Note on the "Prime Cap": While lenders may now use alternative base rates like SOFR or Treasury Notes, your total interest rate is legally protected. It cannot exceed the maximum rates listed in thet table below, which are calculated using the WSJ Prime Rate.

SBA 7(a) loan interest rate maximums
Loan amount Max fixed rate Max variable rate
$25,000 or less Prime + 8% = 14.75% Prime + 6.5% = 13.25%
$25,000-$50,000 Prime + 7% = 13.75% Prime + 6.5% = 13.25%
$50,000-$250,000 Prime + 6% = 12.75% Prime + 6% = 12.75%
Over $250,000 Prime + 5% = 11.75% Prime + 3% = 9.75%

Base rate used: Wall Street Journal Prime Rate at 6.75% (July 2026).

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How SBA 7(a) loan interest rates are calculated.

The formula for a variable-rate SBA 7(a) loan is: (BaseRate)+(LenderSpread)=TotalInterestRate

  1. Identify the relevant base rate. The lender now selects one of several SBA-approved benchmarks:
    1. WSJ Prime Rate: The most common benchmark, set by the largest U.S. banks.
    2. SBA Optional Peg Rate: A quarterly rate set by the SBA for those seeking more stability.
    3. 30-Day SOFR: A broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities.
    4. 5- or 10-Year Treasury Notes: Fixed-income instruments backed by the U.S. government.
  2. Determine the lender spread. Also called a markup, the "spread" is the additional percentage a lender adds to the base rate to cover their risk and profit.
    1. Negotiable: This is the part of the rate you can negotiate based on your business's creditworthiness and DSCR.
    2. Capped: The SBA limits how high this spread can go based on your loan amount.
  3. Apply the "Prime Cap". Even if a lender uses an alternative base rate like SOFR or a Treasury Note, the final interest rate cannot exceed the maximum allowable rate as if it were calculated using the Prime Rate.
  4. Final offered rate may be lower, based on lender and borrower credit.

Example: If you are applying for a $500,000 loan, the max allowable spread is Prime +3.0%.

Base Rate Component Prime Calculation SOFR Calculation
Base Rate (Mar 2026) 6.75% 3.68%
Typical Spread +3.00% +3.00%
Calculated Rate 9.75% 6.68%
Legal Maximum 9.75% 9.75%
  • $300,000 standard SBA 7(a) loan.
    • Fixed: up to 11.75% | Variable: Up to 9.75% (based on Prime.)
  • $40,000 SBA 7(a) small loan.
    • Fixed: Up to 13.75% | Variable: Up to 13.25%

What impacts the rate you actually get.

  • Your credit profile and business financials
  • Whether the lender uses a fixed or variable structure
  • Lender-specific spreads (below the SBA cap)
  • The prime rate at the time of pricing
  • The lenders chosen base rate, if applying for a 7(a) loan.

Note: Actual APR often includes fees and guarantee costs beyond the interest rate cap.

SBA 504 loan interest rate table - July 2026

504 debenture rates are set on a fixed monthly Pricing Date (the first Thursday of the first full week of the month) per SBA's published funding calendar (Notice 5000-869666). Not every cycle sells all three terms: 20- and 25-year debentures price monthly, but 10-year debentures sell only in odd-numbered months (January, March, May, July, September, November).

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July 2026 marked a full debenture sale cycle (10, 20, and 25 year terms were all priced on July 9).

Loan Term Standard Refinance Manufacturing
10-year 6.19% 6.20% 5.89%
20-year 6.20% 6.21% 5.95%
25-year 6.17% 6.18% 5.93%

Each rate reflects the relevant Treasury yield on the pricing date plus a fixed increment, which covers CDC and SBA servicing costs. 

How 504 loan interest rates are calculated

The formula for an SBA 504 debenture is (Reference Treasury Yield) + (CDC/ SBA Increment) = Effective Interest Rate

  1. Identify the Pricing Date. Unlike 7(a) loans, which can reprice periodically, a 504 debenture’s rate is set once on a fixed monthly Pricing Date established by the SBA’s published funding calendar.
  2. Identify the relevant Treasury benchmark. The benchmark depends on the debenture’s term:
    1. 10-year debentures priced off the 5-year Treasury Note yield.
    2. 20- and 25-year debentures are priced off the 10-year Treasury Note yield.
  3. Add the increment. This is the additional percentage added to the Treasury yield to cover underwriting costs and ongoing servicing. The increment is set through the debenture sale, rather than negotiated with a lender.
  4. Rate locks in at pricing. Once the debenture prices, the effective rate is fixed for the entire term of the loan (10, 20, or 25 years). The borrower's rate will not change afterwards.
  5. Program fees apply separately from the interest rate. SBA and CDC fees (upfront guaranty fee, annual service fee, CDC servicing) are financed into the loan rather than affecting the quoted rate itself. 

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Other SBA program rates.

  • SBA Microloans: Based on lender cost of funds (typically about 8-13%).

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SBA loan interest rates vs. other financing options.

SBA interest rates vs. other financing options
Loan type Rate structure Typical rate
SBA 7(a) Base Rate + markup Maximum 9.75-14.75%
SBA 504 Fixed (5 and 10 year treasury issue rate + incremental peg) Approx. 3% of loan amount
Business term loan Market-based About 10-27% typical
Line of credit Variable About 10-28% typical

Sources