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Where to Find the Best SBA Interest Rates

January 31, 2022
Avatar of James Thomas

Owning your own business can be largely rewarding. However, there are many details you must consider to ensure that it’s successful. One of your biggest concerns should be to find the right funding for your business. You should aim for SBA loans with the best interest rates.

What are SBA Loans?

SBA loans are loans that are given to small businesses when they need funding. They are partially backed by the U.S. Small Business Administration but issued by lenders such as banks. SBA loans have strict standards but carry more favorable interest rates than their competitors, which makes them highly attractive for funding a business.

What are the Different Types of SBA Loans?

There are six different types of SBA loans from which you can choose for funding your business. They include the following:

  • SBA 7(a) loans: These loans are available to businesses with up to $5 million of working capital.
  • SBA CDC/504 loans: These loans are available for buying commercial real estate that is owner-occupied.
  • SBA CAPLines: These loans are a line of credit you can use again to fund your business.
  • SBA Export Loans: These loans are specifically targeted toward owners of export businesses to give their exports a boost.
  • SBA Microloans: These are loans that are awarded to businesses that have up to $50,000 of working capital.
  • SBA Disaster Loans: Businesses that have been affected by a natural disaster that’s been officially declared can benefit from these SBA loans.

These loans are available with varying interest rates. It’s important to know what to expect with the SBA loan that’s most appropriate for your business. It can help you to secure the best SBA interest rates.

Where to Find the Best SBA Interest Rates

When you decide to get a small business loan through the SBA, you can get the best interest rates. Rates are the lowest among these loans compared with others. The loans are available from lenders who offer loans through the SBA. These lenders are more flexible, which means you can find the best interest rates.

SBA 7(a) loans and SBA 504 loans are the most popular options of all for funding your small business. SBA 7(a) loans are available with fixed or variable rates. Currently, the variable interest rates on these loans range from 7.5 to 8% for loans up to $25,000. For loans between $25,001 to $50,000, the variable interest rates are 6.5 to 7%. For loans over $50,000, the variable interest rate is 5.5 to 6%.

For a fixed SBA 7(a) loan, the interest rates are 8% for loans up to $25,000, 7% for loans $25,001 to $50,000, 6% for loans $50,000 to $250,000 and 5% for loans over $250,000.

SBA 504 loans carry interest rates of 3.109% for a 10-year loan term, $3.022% for a 20-year term, and 3.168% for a 25-year term.

According to Lantern by SoFi, it’s possible to find the best interest rates with your SBA loan. Doing your homework beforehand is the best way to find the right loan for your business.

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