SBA loan rates and fees: questions and answers

All 34 answers on SBA loan rates and fees

Each entry gives the short answer. Open it for the full explanation and its sources.

What is the maximum interest rate on an SBA 7(a) loan?

SBA caps variable 7(a) rates at Prime plus 3.0 to 6.5 percentage points, depending on loan size. The smallest loans carry the highest cap, and lenders can charge less. The limits are in 13 CFR § 120.214(d).

Does a slightly larger SBA loan have a lower maximum interest rate?

Yes. The cap steps down at three loan amounts: above $50,000, above $250,000 and above $350,000. The lower cap applies to the whole loan, under 13 CFR § 120.214(d).

Do state usury laws limit the interest rate on an SBA 7(a) loan?

No. SOP 50 10 8.1, Appendix 18, Para. A.1 says SBA's regulations govern the maximum rate on any 7(a) loan and preempt state constitutions and laws. Your limit is the SBA maximum for your loan size.

Can I negotiate the interest rate on an SBA loan?

Yes. SOP 50 10 8.1, Appendix 18, Para. A.1 says the lender negotiates the rate with you, subject to SBA's maximums. SBA sets the ceiling. The lender sets the price, so quotes can differ.

Can an SBA 7(a) loan have a fixed interest rate?

Yes. SOP 50 10 8.1, Appendix 18 allows fixed or variable rates. The maximum fixed rate is the Prime rate on the first business day of the month plus an allowable spread that SBA publishes.

Can an SBA lender hold my rate steady for the first few years and then let it float?

Yes. SOP 50 10 8.1, Appendix 18 lets lenders delay the first rate adjustment and notes periods as long as 5 years. The loan is still a variable-rate loan, so the variable caps apply.

How often can the rate on an SBA variable-rate loan change?

A variable 7(a) rate can adjust no more often than monthly under 13 CFR § 120.214(a). Your Note sets the actual schedule, and SBA says many lenders use the calendar quarter.

Which base rates can a lender use on a variable-rate SBA loan?

A 7(a) lender can use the Prime rate or the SBA Optional Peg Rate. Since March 1, 2026 it can also use SOFR, the 5-year Treasury Note rate or the 10-year Treasury Note rate. SOP 50 10 8.1, Appendix 18, Para. A lists them.

Can an SBA loan be priced off SOFR or a Treasury rate?

Yes. Since March 1, 2026, variable 7(a) loans can use SOFR, the 5-year Treasury Note rate or the 10-year Treasury Note rate. Under SOP 50 10 8.1, Appendix 18, the all-in rate is still capped at Prime plus the spread for the loan size.

Is there a limit on how high my SBA variable rate can go?

SBA caps the spread, not the final rate, so your rate can rise with Prime. A lender may add a ceiling and floor. Under 13 CFR § 120.214(b), the floor gap must be at least as wide as the ceiling gap.

Can the interest rate on my SBA loan change after approval?

Yes, before first disbursement, if you consent in writing and the new rate stays within the maximum at application. The lender may change the rate or switch between fixed and variable, under SOP 50 10 8.1, Appendix 18.

Can an SBA lender raise my interest rate if I default?

Usually no. SOP 50 10 8.1, Appendix 18 bars default interest rates on 7(a) loans. SBA Express and Export Express are exceptions. On SBA Express, a default rate is allowed, if commercially reasonable and consistent with the lender's similar non-SBA loans.

How does a change in the Prime rate affect my SBA loan payment?

A 1 percentage point move in Prime changes annual interest by about $1,000 per $100,000 of balance. Your payment changes at the next adjustment date, and lenders typically re-amortize then, per SOP 50 10 8.1, Appendix 18.

What is the SBA guaranty fee for fiscal year 2027?

On 7(a) loans up to $150,000, the FY2027 fee is 2% of the guaranteed portion. From there to $700,000 it is 3% of the guaranteed portion. Larger loans pay more. SBA Information Notice 5000-881797 covers approvals October 1, 2026 through September 30, 2027.

Which fiscal year's SBA fees apply to my loan?

The approval date controls. SBA Information Notice 5000-881797 applies to 7(a) loans approved October 1, 2026 through September 30, 2027. A later increase uses the fee rules in effect when the loan was first approved.

Can I pay the SBA guaranty fee with loan proceeds?

Yes. The lender pays SBA and may pass the cost to you, and you may use loan proceeds to cover it. The first disbursement cannot be made primarily to pay the fee, under 13 CFR § 120.220(b).

Do two SBA loans approved within 90 days count as one for fees?

Yes. SBA counts 7(a) loans approved within 90 days of each other as one loan for the guaranty percentage and upfront fee. The rule covers affiliates and different lenders, under SBA Information Notice 5000-881797.

Do I pay the SBA annual service fee on a 7(a) loan?

No. For FY2027 the lender pays SBA 0.55% of the outstanding guaranteed balance each year. It may not charge that fee to you, under 13 CFR § 120.220(f) and SBA Information Notice 5000-881797.

Which SBA 7(a) loans have no upfront guaranty fee in fiscal year 2027?

SBA Information Notice 5000-881797 waives the FY2027 upfront fee for three groups. It is 0% for loans of $700,000 or less to manufacturers (NAICS 31-33), listed food supply chain businesses and businesses in rural areas. SBA Express loans to veteran-owned businesses also pay $0.

How does SBA decide if my business is in a rural area for the fee waiver?

SBA looks at the county. SOP 50 10 8.1, Appendix 3 counts an area as rural if its county is at least 30 percent rural, per the Census Bureau. In FY2027 that can zero out the upfront fee on loans of $700,000 or less.

How much can an SBA lender charge me for packaging a loan?

A lender may charge a flat fee of up to $2,500 per loan without documenting the work. Above that it must complete SBA Form 159, and percentage fees are limited, under SOP 50 10 8.1, Section A, Chapter 4, Para. C.2.

How much can an SBA loan broker or packager charge?

A percentage fee may not exceed 3% on loans of $50,000 or less, 2% up to $1,000,000 and 0.25% above that. The total limit is $30,000. SOP 50 10 8.1, Section A, Chapter 4, Para. D.7 sets these.

Can an SBA lender charge origination fees or points?

No. SOP 50 10 8.1, Section A, Chapter 4, Para. C.4 prohibits commitment, origination, broker, referral and similar fees, points, prepayment fees and renewal fees. Any lender fee not expressly permitted in 13 CFR § 120.221 is prohibited.

Can a broker charge me only if my SBA loan closes?

No. SBA does not allow contingency fees, meaning fees paid only if the loan is approved or closed. SOP 50 10 8.1, Section A, Chapter 4, Paras. D.2 and D.7 and SBA Form 159 all state that rule.

Can a loan broker be paid by both me and the lender?

Only for different services. Under SOP 50 10 8.1, Section A, Chapter 4, Para. D.2, an Agent may package your application for you and take a referral fee from the lender. No Agent may be paid by both for the same service.

What closing costs can an SBA lender pass on to me?

A lender may collect necessary out-of-pocket costs, such as filing and recording fees, appraisals and environmental reports, plus hourly legal fees. SOP 50 10 8.1, Section A, Chapter 4, Para. C.2 and 13 CFR § 120.221 set the list.

What is SBA Form 159 and who signs it?

SBA Form 159 is the Fee Disclosure and Compensation Agreement for 7(a) and 504 loans. When an Agent is paid to assist, the applicant, the Agent and the lender all sign. SOP 50 10 8.1, Section A, Chapter 4, Para. D.8 sets the rule.

Who does not need to complete SBA Form 159?

SOP 50 10 8.1, Section A, Chapter 4, Para. D.8 lists seven exceptions, including your accountant for routine statements, the closing attorney, the lender's appraiser and an SBA-reviewed Lender Service Provider.

What has to be attached to SBA Form 159 when fees exceed $2,500?

When one Agent's total pay exceeds $2,500, the form needs an itemization and supporting documents. They show the work done, the fee basis and any hourly rate and hours, under SBA Form 159, p. 2.

Is there a prepayment penalty on an SBA 7(a) loan?

Only on loans with maturities of 15 years or more. SBA's fee is 5%, 3% and 1% of the prepaid amount in years one, two and three. It applies when you voluntarily prepay more than 25% early, under 13 CFR § 120.223. Lenders may not add their own.

How does the 25 percent test for the SBA prepayment fee work?

The fee applies when voluntary prepayments in one of the first three 12-month periods exceed 25% of the highest principal balance. The loan must run 15 years or more, under 13 CFR § 120.223(a).

What fees come with an SBA 7(a) loan?

Expect an upfront guaranty fee, possible packaging fees and out-of-pocket closing costs. Lenders may not charge origination fees or points. SOP 50 10 8.1, Section A, Chapter 4, Para. C and 13 CFR § 120.221 list what is allowed.

Can one SBA loan have a fixed rate on part and a variable rate on the rest?

Yes. SOP 50 10 8.1, Appendix 18 lets a lender fix the rate on either the guaranteed or unguaranteed portion and float the other. Neither rate may exceed the SBA maximum, and SBA treats the whole loan as variable.

Is the SBA guaranty fee lower on a loan of 12 months or less?

Yes. For FY2027 the fee is 0.25% of the guaranteed portion when the maturity is 12 months or less, under SBA Information Notice 5000-881797. If the maturity later passes 12 months, an added fee is due.