How SBA 7(a) interest rates work
7(a) loans can carry fixed or variable rates. Variable pricing uses a permitted base rate plus a spread, subject to SBA maximums. For loans above $350,000, the published maximum variable spread is currently base plus 3 percentage points. Smaller loan amounts have different caps.
A maximum is a ceiling, not a quote. Ask which base is used, the proposed spread, how often the rate can reset, and whether a floor applies. This page does not publish a live rate quote.
Why SBA 504 has two pricing conversations
The CDC/SBA debenture provides long-term fixed-rate financing. The bank or senior lender’s portion carries its own terms. Comparing only the debenture rate leaves out part of the cost.
Request the loan amount, payment, amortization, maturity, and rate structure for each portion. For construction, also ask about interim funding and how the project transitions to permanent financing.
Compare more than the headline rate
- Payment: What is due each month across all loans in the proposed structure?
- Rate changes: What happens to the payment if the variable base increases?
- Timing: When is pricing set, and how long is the proposal valid?
- Loan term: Are amortization and maturity the same, or could a balance be due sooner?
- Exit costs: What prepayment provisions apply if you refinance or sell?
- Cash at closing: Which costs are financed and which must be paid directly?
SBA fees and other closing costs
A 7(a) upfront guaranty fee may be passed to the borrower; the lender’s annual SBA service fee cannot. Applicable fees depend on current SBA schedules and the transaction. Obtain an itemized estimate rather than relying on a prior-year fee chart.
Discuss appraisal, environmental, legal, title, and other project expenses where applicable. Ask which amounts are estimates, which are third-party costs, and when they become payable.
Request a financing conversation
To discuss potential terms, share the financing purpose, approximate amount, business location, transaction stage, and timeline. That provides a starting point for reviewing program fit and the information needed for a proposal.