The SBA 7(a) loan program is the most common government-backed small business loan in the US. Backed by the Small Business Administration, these loans allow banks to lend to businesses that might not qualify for conventional financing.
SBA 7(a) current rates
SBA 7(a) rates are variable and tied to the Wall Street Journal Prime Rate. As of 2026:
| Loan size | Maximum variable rate |
|---|---|
| ≤$25,000 | Prime + 4.25% |
| $25,001–$50,000 | Prime + 3.25% |
| >$50,000 (7+ year term) | Prime + 2.75% |
| >$50,000 (<7 year term) | Prime + 2.25% |
Check the current Prime Rate at wsj.com. Add the SBA spread to get your maximum rate (your actual rate may be lower based on creditworthiness).
SBA 7(a) payment example
Loan: $250,000 at 10.5% APR (Prime 7.5% + spread 3.0%) over 84 months: Monthly payment: $4,149/month Total interest: $98,506 (39.4% of principal)
DSCR requirement
SBA lenders require Debt Service Coverage Ratio ≥ 1.25: DSCR = Annual Net Operating Income / Annual Debt Payments
For a $4,149/month payment (=$49,788/year), you need minimum NOI of: $49,788 × 1.25 = $62,235/year ($5,186/month)
If your business generates less NOI, SBA lenders will decline the application.
How to qualify for an SBA loan
Credit: Most SBA lenders require 650+ personal FICO score. Some SBA preferred lenders accept 620+. Your business credit score (Dun & Bradstreet, Experian Business) also matters.
Time in business: Most lenders require 2+ years. SBA Microloans and some Community Advantage programs accept startups.
Revenue: No minimum from SBA, but lenders need to see DSCR ≥ 1.25.
Personal guarantee: Required for all owners with 20%+ ownership. You're personally liable even if the business fails.
Collateral: SBA requires lenders to take available collateral but won't decline solely due to insufficient collateral. Your home equity often serves as collateral for larger loans.
Calculate your SBA loan payment at the Business Loan Calculator.