Current SBA Loan Rates and Programs In 2021 






The Small Business Administration has various loan programs available for American small businesses to utilize. These loan programs have many unique features, but you must also note their rates when finding a sensible solution. You may qualify for various benefits depending on what is available, so be specific when looking for a deal you know will work for your business.

Note: All program details and rates are accurate as of April 2021. All values are subject to change.

SBA 7(a) Loan

The most prominent loan you can find from the SBA is the 7(a) loan. It is available for businesses looking for working capital or to pay for equipment. 7(a) loans are also available for businesses that need refinancing help.

The funds in the 7(a) come from banks and other financial institutions in the program. The SBA does guarantee part of the loan. The group also establishes set interest rates and other terms for the loan.

The current SBA interest rates for a 7(a) loan will vary surrounding the value of the loan and how many years the loan will last:

  • Up to $25,000 for less than seven years: 7.5%
  • Up to $25,000 for more than seven years: 8%
  • $25,000 to $50,000 for less than seven years: 6.5%
  • $25,000 to $50,000 for more than seven years: 7%
  • $50,000 or more for less than seven years: 5.5%
  • $50,000 or more for more than seven years: 6%

You can borrow up to $5 million in your 7(a) loan. There are no minimums to follow here.

The loan can last for up to ten years. The length can go up to twenty-five years if your loan is for real estate purposes.

The SBA will also guarantee 85% of the loan if it is under $150,000 in value. It will guarantee 75% of the loan if it is over that total.

You must meet all requirements for obtaining an SBA 7(a) loan. These rules include the following:

  • Your business must have a fair credit rating.
  • The entity must also be at least two years of age.
  • You must have a strong cash flow and a positive debt-to-income ratio.

SBA CDC/504 Loan

A CDC/504 loan is for those who need funds to pay for fixed assets. These include assets like real estate, machines, land parcels, and other similar items. The SBA offers these loans through community development companies or CDCs.

About 40% of the loan is funded by a CDC. Your business will fund 10% of the value. The remaining half will be funded by a bank or other financial partner that will help you attain the loan. The percentages may shift if your business is less than two years of age. You might be responsible for paying more of the loan if your business is relatively new.

A ten-year CDC/504 loan will have a rate of about 2.97%. A twenty-year loan has a rate of about 3.82%.

The rates are fixed ones, meaning they will remain for the duration of the loan. You may be able to negotiate a better deal if your business’ credit rating improves or ongoing loan rates change. There are no guarantees any efforts to negotiate a new deal on your loan will work.

Your rate will vary over the situation for your loan and your credit rating. These listed values are general estimates for what you might spend on your work.

A CDC/504 loan can work for up to $5 million, but it can be $5.5 million in some situations. A real estate loan can last for twenty years, while a loan for machinery or equipment can be as long as ten years.

You must also meet these terms to qualify for a CDC/504 loan:

  • Your business must be a for-profit entity.
  • You must conduct business in the United States.
  • You should not have any funds available through other sources before qualifying for the loan.
  • There should be some idea of what you want to do with your business. A suitable business plan can illustrate what you are aiming to manage.
  • You must also show you are capable of paying off the loan. Proof of cash flow and assets will be necessary.

Disaster Loans

The SBA also provides loans to help businesses impacted by various disasters. A disaster loan will cover recovery costs that aren’t held by FEMA or your insurance company.

The long-term SBA loan here can be utilized to replace properties and assets that you cannot recover. The loan allows you to recover and keep your business operations running well after the disaster. You’ll have the working capital necessary for ensuring your business can stay afloat.

An SBA loan here can work as an Economic Injury Disaster Loan or EIDL. The loan can cover debts, payroll issues, accounts payable, and various other bills. These are bills that you might not normally be capable of paying off due to the disaster event.

A for-profit business can attain one of these loans for 3.75%. A non-profit business can qualify for a lower rate at 2.75%. These are relatively low rates, as they ensure a group will have more control over recovering without spending as much on loans. Your business would need to provide proof of the situation at hand and a plan for how you’re going to pay for the loan.

The loan can last for up to thirty years. Payments are deferred for the first twelve months. The rate is also fixed, although you may be capable of negotiating new terms with your merchant services provider. You may also be eligible to pay off the loan early, although you should check the terms of your specific deal to see if early repayment fees apply.

You can also borrow up to $2 million when handling one of these loans, but you are expected to provide some collateral before you can qualify for the loan. You can also take out a disaster loan of up to $25,000 if you don’t have any collateral.





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