Current SBA 7(a) Loan Interest Rates — June 2026 (504, Express, Microloans)

As of June 2026, SBA loan interest rates run 9–11.5% APR on a standard 7(a) variable loan (Prime 6.75% + a 2.25–4.75% lender margin), 9.5–13.5% on a fixed-rate 7(a), 6.5–7.5% fixed on the 504 CDC portion, 11.25–13.25% on SBA Express, and 8–13% on SBA microloans. SBA rates are pegged to the Prime Rate (currently 6.75%) and the SBA Optional Peg Rate (4.50% for Q2 2026), so they move with the Fed. Bay Street Lending tracks these across 50+ SBA-approved lenders, refreshed weekly. Here's what borrowers actually pay across each SBA program:

• SBA 7(a) — variable rate: Prime + 2.25% to 4.75% (currently roughly 9–11.5% APR)
• SBA 7(a) — fixed rate: SBA peg + 1% to 5% (currently roughly 9.5–13.5% APR)
• SBA 504 — CDC portion: tied to 10-year Treasury + 0.04–0.13% spread (currently roughly 6.5–7.5% fixed)
• SBA 504 — bank portion: bank's discretion, typically 7–9% fixed or variable
• SBA Express: Prime + 4.5% to 6.5% (currently roughly 11.25–13.25% APR with Prime 6.75%)
• SBA microloans: 8–13% APR, set by the individual microlender

Compare those to conventional bank business loans (currently 7–10% for established businesses) and conventional commercial real estate (7–8.5%) and you'll see SBA rates aren't always lower than conventional — the value comes from the SBA program's flexibility on collateral, down payment, and term length.

Q3 2026 peg rate refresh (July 1): The SBA Optional Peg Rate — the benchmark used to cap fixed-rate 7(a) loans — refreshes quarterly. The Q2 2026 peg is 4.50%; the next reset publishes on July 1, 2026. The Fed held rates steady at its May 2026 FOMC meeting, which means the Q3 peg is likely to land within ±0.25% of the current 4.50% level (the SBA peg tracks 5-year Treasury yields, which have been range-bound since the December 2025 rate cut). If you're shopping a fixed-rate 7(a) closing in late June, that pricing is locked in under the Q2 peg. Closings on or after July 1 use whatever the Q3 number comes in at — usually a 0.1–0.3% swing for most borrowers.

The SBA doesn't set the loan rate — the lender does, within SBA-imposed caps. The maximum margin a lender can add depends on loan size and term:

• 7(a) loans up to $50K: Lender can charge Prime + up to 6.5% (capped highest because small loans are most expensive to service)
• 7(a) loans $50K–$250K: Prime + up to 6%
• 7(a) loans $250K–$350K: Prime + up to 4.5%
• 7(a) loans over $350K: Prime + up to 3%

For larger loans the cap is much tighter, which is why $1M+ SBA 7(a) deals are typically priced at Prime + 2.25–2.75%. For smaller loans (under $250K) you'll see significantly higher rates — that's why borrowers seeking SBA loans under $50K should always evaluate SBA microloans or conventional alternatives in parallel.

SBA loan terms align to the useful life of the asset being funded:

Use of funds	Maximum term
Working capital	10 years
Equipment	10 years (up to useful life)
Inventory	10 years
Business acquisition	10 years
Real estate (commercial)	25 years
Construction	25 years
Debt refinancing	Same term as original (up to 10–25 years)

Longer terms mean lower monthly payments but more total interest. For working capital, the 10-year SBA term is meaningfully longer than conventional alternatives (which typically max out at 5 years), which is one of the program's biggest advantages.

Beyond the interest rate, SBA loans carry a guaranty fee paid to the SBA. This fee scales with loan size:

• Loans up to $1M: 0.55–3.5% of the guaranteed portion
• Loans $1M–$2M: 3.5–3.75%
• Loans over $2M: 3.75%

The guaranty fee is a one-time charge typically rolled into the loan amount (you don't pay it out of pocket). For a $1M 7(a) loan with a 75% SBA guaranty, the fee would be roughly 3.5% × $750K = $26,250.

Lenders also charge their own packaging and closing fees, typically $1,500–$5,000 for smaller loans and 0.5–1% of loan amount for larger deals. Third-party reports (appraisals, environmental, business valuations) range from $500–$5,000 depending on complexity.

Total upfront cost on a typical $500K 7(a) deal: roughly 1.5–2.5% of loan amount, financed into the loan.

The interest rate quoted on an SBA loan is not the full cost of the loan. The effective APR — interest rate plus fees amortized over the term — is what actually represents the cost of capital. Examples:

• $500K 7(a), 10-year term, Prime + 2.75% (~9.5% rate): Quoted rate 9.5%, effective APR roughly 10.0–10.5% after fees
• $2M 504 deal (50/40/10): Bank portion at 8% + CDC portion at 7%, blended effective APR roughly 7.5–8% after fees
• $100K 7(a) Express, 7-year term: Quoted rate 13%, effective APR roughly 14.5–15% after fees (smaller loans carry proportionally larger fee impact)

When comparing SBA loans to conventional alternatives, always compare effective APR, not quoted rates.

The SBA 504 loan is the program of choice for owner-occupied commercial real estate and major equipment purchases. Unlike SBA 7(a), the 504 is a two-loan structure: a CDC portion (40% of the project, SBA-backed and tied to Treasury rates) plus a bank portion (50%, conventionally priced) and a 10% borrower down payment. This structure produces meaningfully lower rates than 7(a) for real estate-heavy projects. For non-real-estate equipment purchases, the conventional equipment financing path is often faster and more flexible than 504.

Current SBA 504 Loan Interest Rates (June 2026)

• 504 CDC portion (40%): 10-year Treasury + 0.04–0.13% spread → roughly 6.5–7.5% fixed through the life of the loan
• 504 bank portion (50%): bank's discretion, typically 7–9% fixed or variable
• Borrower down payment (10%): 15–20% for startups, special-purpose properties, or limited-market real estate

The CDC portion locks at funding for 10, 20, or 25 years — among the lowest fixed-rate small-business financing available in 2026. The bank portion is conventionally priced and varies more widely. The blended effective rate on a typical 504 project sits around 7.0–8.0% in June 2026.

SBA 504 Loan Rates Today vs Historical

504 CDC rates track the 10-year Treasury, which has held steady through Q1 2026. Effective rates today are essentially flat versus late 2025 — the Fed's pause through Q1 has stabilized the long end of the curve. Expect 504 CDC rates in the 6.5–7.5% range for the rest of Q2 2026 absent a material Treasury move.

SBA 504 Loan Maximum Amount (2026)

The standard 504 maximum is $5.5 million on the SBA-guaranteed CDC portion. Manufacturing projects and energy-efficient/green projects qualify for higher caps — up to $5.5M per project with multiple 504 loans permitted in some cases. The bank portion sits on top of the SBA cap, so total project size can exceed $10–12M for a single 504 transaction.

How Much Are 504 Loan Fees?

504 fees are paid at funding and rolled into the loan in most cases:

• SBA guarantee fee: 0.5% of the CDC portion
• CDC processing fee: 1.5% of the CDC portion (max ~$78,000 in 2026)
• SBA funding fee: 0.25% of the CDC portion
• Bank fees on the 50% portion: typically 0.5–1% origination plus appraisal, environmental, title, and legal costs
• Annual servicing fee: 0.32% of the outstanding CDC balance, paid monthly

All-in fee load typically lands around 2.5–3.5% of the project cost, comparable to or slightly cheaper than equivalent 7(a) fee structures for real estate.

SBA 504 Loan Terms

• 10 years: equipment with a useful life under 10 years
• 20 years: heavy equipment, machinery, and most commercial real estate
• 25 years: commercial real estate (long-term real estate financing — the most common 504 structure)

504 prepayment is allowed but carries a declining penalty in the first 10 years (10% of outstanding balance in year 1, declining 1% per year). After year 10, prepayment is penalty-free.

SBA Express is the SBA's fast-track 7(a) variant — a streamlined program where the SBA gives the lender a response within 36 hours of application. The trade for that speed: higher rate caps, smaller maximum loan amount, and a 50% SBA guarantee (vs 75–85% on standard 7(a)). Express works well when speed-to-funding matters more than absolute lowest rate.

Current SBA Express Loan Interest Rates (June 2026)

• Loans over $50,000: Prime + 4.5% maximum → currently roughly 11.25% APR
• Loans of $50,000 or less: Prime + 6.5% maximum → currently roughly 13.25% APR
• Floor: lender-set, but generally not below Prime + 3.0% in practice

Rates can be fixed or variable. Most Express working capital loans are variable; equipment Express loans more commonly fixed.

SBA Express Loan Maximum Amount (2026)

The current SBA Express loan maximum is $500,000 — raised from $350,000 in recent years and reaffirmed in the 2026 SBA SOP. This is meaningfully smaller than standard 7(a) (which goes to $5M), but adequate for working capital, equipment, and small real estate purchases.

For Veteran Express (the SBA Express variant for veteran-owned businesses), the maximum is also $500,000 with a 0% guarantee fee.

SBA Express Loan Requirements

• Time in business: 2+ years typically; some lenders accept 1+ year for strong borrowers
• Personal credit: 650+ FICO; 680+ for the best Express rates
• Annual revenue: generally $50,000+ minimum, though larger Express requests need stronger revenue
• Owner-occupancy: for any real estate component, owner must occupy 51%+
• SBA size standards: small business size standards apply (most service businesses qualify under 500 employees or $7.5M+ revenue thresholds depending on NAICS code)
• Existing lender relationship: not required, but Express works best with banks that have an existing SBA Express designation — they have streamlined internal underwriting

SBA Express Loan Terms

• Working capital: up to 7 years (revolving lines available, up to 10 years on certain lenders)
• Equipment: up to 10 years (or useful life of equipment, whichever is shorter)
• Real estate: up to 25 years (rare for Express — most real estate goes 7(a) or 504)
• Decision time: SBA responds to lender in 36 hours; full funding typically 30–45 days from complete application

SBA Express vs Standard 7(a): When Each Wins

Choose Express when: you need speed (30–45 day funding vs 60–90 for standard 7(a)), your request is under $500K, and a slightly higher rate cap is acceptable. Lender prefers Express for faster pipeline turnover.

Choose standard 7(a) when: you need over $500K, you want the lowest possible 7(a) rate (Prime + 2.25–4.75% caps vs Express's Prime + 4.5–6.5%), or you want the higher SBA guarantee (75–85%) — which can matter for collateral-light deals.

For a complete SBA loan picture across programs, see our SBA loan requirements guide, or explore SBA financing options →.

SBA loans aren't the cheapest financing available — established businesses with strong credit can get conventional bank loans at lower rates. The value of the SBA program comes from three things:

1. Access for businesses that don't qualify conventionally. The SBA guarantee lets lenders extend credit to businesses they'd otherwise reject. If a conventional bank says no, the SBA program may say yes at SBA rates — which is dramatically better than no financing at all.

2. Longer terms than conventional. 10-year working capital and 25-year real estate terms aren't available conventionally outside of investment-grade borrowers. Longer terms = lower monthly payments = better cash flow even at slightly higher rates.

3. Lower down payments than conventional. Conventional commercial real estate requires 25–35% down. SBA 504 requires 10%. For owner-occupied real estate buyers, that down payment difference is often the deciding factor.

For a fuller breakdown of when SBA makes sense vs alternatives, see our SBA loan requirements guide and explore SBA financing options →.

This is the most common SBA decision for borrowers funding more than $500K. The two programs target different use cases and the wrong choice can cost 1–3 percentage points of effective rate or weeks of extra closing time. Here's the practical comparison.

Decision factor	SBA 7(a)	SBA 504
Use of funds	Working capital, equipment, real estate, debt refi, business acquisition, partner buyout	Real estate (owner-occupied) and major equipment only
Maximum loan size	$5M total SBA exposure	$5.5M on CDC portion (project size can exceed $10M)
Down payment	10% typical (sometimes lower with strong collateral)	10% standard (15–20% for startups or special-purpose property)
Effective rate (June 2026)	9–11.5% APR variable on 7(a)	7.0–8.0% blended (CDC 6.5–7.5% fixed + bank 7–9%)
Term	10 years (working capital), 25 years (real estate)	10, 20, or 25 years depending on asset
Rate fixity	Mostly variable (Prime + spread)	CDC portion fixed at funding, bank portion bank's discretion
Closing timeline	45–75 days	60–120 days (two-loan structure)
Prepayment penalty	Declining penalty first 3 yrs on 15+ yr loans; none on shorter terms	Declining penalty 10 years (10%/yr → 0%)

When SBA 7(a) Wins

Choose 7(a) if your use of funds is flexible — working capital, debt refinancing, partner buyouts, business acquisitions, or a mix of equipment + working capital in the same deal. 7(a) is also the right choice if speed matters more than absolute lowest rate: 45–75 day closings vs 504's 60–120 days. The variable-rate structure becomes a liability if you expect Prime to rise meaningfully — most borrowers in 2026 are treating that as a manageable risk given the Fed's extended pause.

When SBA 504 Wins

Choose 504 when you're buying or refinancing owner-occupied commercial real estate, or financing a major capital equipment purchase, AND the project is large enough that the 1–3% rate savings on the CDC portion meaningfully outweighs the extra closing time and complexity. For projects under $1M, that math often doesn't justify the 504 structure overhead. For projects over $2M with a real estate component, 504 almost always wins on total interest paid over the term.

The Honest Tiebreaker

If your project includes any use of funds that isn't real estate or equipment (working capital, AR financing, debt refi, business acquisition), 7(a) is the only option that can wrap everything into one loan. Splitting a deal across SBA 7(a) + 504 is technically possible but operationally painful — most borrowers in mixed-use situations pick 7(a) and accept the rate premium for simplicity.

The conventional commercial loan vs SBA loan decision usually breaks down to credit profile, collateral position, and timeline tolerance. Either can be the right answer depending on the borrower; the wrong choice costs both time and rate.

When a Conventional Bank Loan Beats SBA

If you have 700+ FICO, 3+ years of operating history, $1M+ annual revenue, real collateral, and a banking relationship — a conventional commercial loan from your bank is almost always the faster, cheaper path. Conventional working capital loans at major banks in 2026 run 7–10% APR for top-tier borrowers, vs SBA 7(a)'s 9–11.5%. The closing timeline is also dramatically shorter — 30–45 days on conventional vs 45–75 on SBA 7(a) — because there's no SBA paperwork layer. Banks also offer more flexible covenants and faster amendment paths for established relationships.

When SBA Beats Conventional

SBA wins meaningfully when conventional declines you or prices you punitively. The structural advantages SBA provides:

• Looser collateral requirements. SBA can fund up to $5M with less collateral than a bank would require for an equivalent conventional loan. Banks require 1:1 collateral coverage on most commercial loans; SBA accepts available collateral plus a personal guarantee even when collateral is below full coverage.
• Longer terms. SBA 7(a) goes to 10 years on working capital — banks typically cap at 5. The longer amortization meaningfully reduces monthly payment burden.
• More flexible credit floors. SBA-approved lenders typically work down to 680 FICO; bank commercial loans usually require 720+. The 40-point spread routinely separates "can't qualify" from "approved at SBA rate."
• Easier qualification for newer businesses. SBA 7(a) is realistic at 2 years in business; bank conventional often requires 3+ years.

The 60-Second Decision

The cleanest test: apply to a major bank for the conventional commercial loan you want. If approved at an acceptable rate within 30 days, take it. If declined, counter-offered with bad terms, or stuck waiting more than 30 days for an answer, pivot to SBA 7(a). For borrowers who already know their profile won't clear bank underwriting (680–700 FICO, under 3 years in business, limited collateral), skipping the bank application and starting directly with an SBA application saves the time and credit pull. And if your profile clears neither — sub-680 FICO, under a year in business, or thin collateral — funding still exists: revenue-based advances and other bad-credit business loan options underwrite on bank cash flow rather than FICO.

The SBA 7(a) program adds 4–8% in fees (guaranty fee + lender fees + closing costs) on top of the interest rate, takes 45–75 days to close, and requires documentation that's materially heavier than online or conventional alternatives. The honest answer to "is an SBA loan worth it?" depends on what you're comparing it to and what your alternative looks like.

SBA Is Worth It When:

• The alternative is an online lender at 18–30% APR. An SBA 7(a) at 11–12% saves $40K–$80K in interest over a typical $500K, 10-year deal. The 60-day closing time and fee load are recouped within 6–12 months of the rate spread. (For a head-to-head on the full set of working capital loan rates and structures — bank, SBA, online, revenue-based — across every product category in 2026, see the dedicated comparison.)
• You need a longer term than conventional offers. A 10-year working capital amortization at SBA pricing produces materially lower monthly payments than a 5-year bank loan at slightly lower rate. For cash-flow-constrained operators, the term matters more than the rate.
• You don't have full collateral coverage. SBA structurally fills the collateral gap conventional lenders can't. Borrowers with strong cash flow but limited collateral are the program's sweet spot.
• The deal is a business acquisition or partner buyout. SBA 7(a) is the only program that finances goodwill at this size range with reasonable terms. Conventional acquisition lending exists but at much tighter loan-to-value and faster amortization.

SBA Is NOT Worth It When:

• You can qualify for conventional at competitive rates. The 60-day SBA timeline costs real money in opportunity terms vs a 30-day conventional close.
• Your funding need is under $150K. The fixed fee load (packaging, guaranty, closing) eats too much of a small loan. SBA Express is faster but rates approach the online-lender range (11.25–13.25% APR) where the program advantage compresses. Below $150K, an online working capital term loan or line of credit usually delivers better effective cost after fees and faster timing.
• You need capital in under 30 days. SBA cannot deliver on this timeline regardless of program or lender. Revenue-based working capital — fundable today or invoice financing are the only realistic paths under 30 days. For genuine 24–48 hour cash needs, a same day business loan (revenue-based advance structure) is the only option that wires the same business day.
• The deal is structurally weak. SBA underwriting is meaningfully more rigorous than online underwriting. A weak deal that an online lender will fund at a premium often won't make it through SBA committee — the time investment is wasted.

The Effective Cost Math

For a $500K SBA 7(a) at 11% APR over 10 years with 3% in total fees vs an online lender at 24% APR over 4 years with 3% origination — the SBA loan saves roughly $190K in total interest, even after accounting for the longer payback window. For most viable small-business operators, the SBA effort/timeline trade is worth it. For borrowers who don't qualify or can't wait, the alternative-finance market exists to bridge that gap at higher cost.

For a personalized comparison across SBA, conventional, and alternative options based on your actual profile, explore SBA financing options → or compare your full set in one brokered application.