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SBA Loan Rates: Dec 2023

GHC Funding Insights: SBA Loan Rates

Updated: December 21, 2023

SBA Loan Interest Rates: December 2023

Here's an overview of the current Small Business Administration (SBA) 7(a) loan interest rates, determined by loan size:

SBA 7a Max Loan Rates December 2023

Interest rates are calculated based on the current prime rate of 8.5%, updated in December 2023.


Staying updated on SBA terms and rates is crucial for any business seeking a small-business loan.

The 7(a) loan, known as the SBA’s flagship product, offers adaptable funding for various purposes like daily operations, acquiring new assets, and refinancing high-interest debts.

Moreover, businesses can access cost-effective financing for significant purchases, including land, through SBA 504 loans.

How SBA Loan Rates Are Established

The SBA establishes interest rate guidelines for lenders to ensure affordable borrowing costs for small-business owners.

Interest rates for SBA 7(a) loans are typically based on the daily prime rate, which fluctuates in response to actions taken by the Federal Reserve, in addition to a lender spread. This spread, negotiated between borrower and lender, can result in either fixed or variable rates. However, the SBA sets a cap on the maximum spread lenders can charge, based on the loan size.

Lenders may also calculate interest rates using alternative methods such as the one-month London Interbank Offered Rate plus 3% or the SBA’s optional peg rate instead of the daily prime rate.

SBA Loan Rates and Terms Breakdown

SBA 7a Interest rates December 2023 for hotel loans

Based on the current prime rate of 8.5% in December 2023.

These interest rates encompass all loans within the 7(a) program, with the exception being Export Working Capital Program loans, where lenders can set their interest rates independently.

It’s essential to note that while interest rates are a part of your expenses, your APR (Annual Percentage Rate) reflects the actual borrowing cost, encompassing both interest rates and associated fees.

SBA 7(a) Loan Terms and Fees

- Loan Amounts: Ranging from no minimum to a maximum of $5 million.

- SBA Guarantee: The SBA guarantees 85% for loans under $150,000 and 75% for loans over $150,000, capping guarantees at $3.75 million.

- Qualification: SBA loans entail specific requirements; understanding SBA loan prerequisites is crucial before pursuing them.

SBA Loan Fees

SBA 7(a) loans entail two fee types: guarantee fees and annual service fees. Guarantee fees cover SBA costs in case of default, while service fees compensate lenders for loan origination and administration.

For the fiscal year 2024 (October 1, 2023, to September 30, 2024), the SBA has outlined the following fees:

- Loans with Terms of 12 Months or Less:

- Loans ≤ $1,000,000: No guarantee fee.

- Loans > $1,000,000: 0.25% of the guaranteed portion.

- Loans with Terms Exceeding 12 Months:

- Loans ≤ $1,000,000: No guarantee fee.

- Loans $1,000,001 - $2,000,000: 1.45% up to $1,000,000, plus 1.7% over $1,000,000.

- Loans > $2,000,000: 3.5% up to $1,000,000, plus 3.75% over $1,000,000.

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