Business loan rates in October 2026: what each type of lender charges
Rates as of October 2026, prime 7.00%. Figures checked October 4, 2026.
As of October 2026, the bank prime rate is 7.00%. In the second quarter of 2026, before the September rate hike, banks reported a median rate of 7.0% at urban banks and 6.7% at rural banks on new small business term loans with variable rates (Kansas City Fed survey). The SBA caps variable rate 7(a) loans at 10.0% to 13.5%, depending on loan size (a published cap). Online term loans typically run 15% to 45% APR, and merchant cash advances work out to roughly 40% to 350% APR (typical ranges, last verified September 6, 2026). Your rate depends mostly on the type of lender, then on your credit, revenue and time in business.
Part of our guide to Small Business Loans: Types, Costs and What It Takes to Qualify.
What are business loan rates by lender type in October 2026?
Bank medians sit near the prime rate, SBA 7(a) rates are capped at prime plus a spread, and online loans and merchant cash advances typically cost the most. The third column says what kind of figure each one is: a published cap is a ceiling, a survey median is what banks reported, and a typical range is what the market commonly does. None is a quote.
Business loan rates by lender type, October 2026
| Lender or product | Rate | What kind of figure | Source | As of |
|---|---|---|---|---|
| Prime rate (the base for variable rate loans) | 7.00% | Published rate, not a cap | Federal Reserve H.15 | Release of October 2, 2026. Effective September 17, 2026 |
| Bank term loan, variable rate | 7.0% at urban banks, 6.7% at rural banks | Survey median. Banks only, lending to firms with $5 million or less in revenue. Collected before the September 2026 hike | Kansas City Fed Small Business Lending Survey, released September 24, 2026 | Second quarter 2026 |
| Bank term loan, all bank term loans | 6% to 20% APR | Typical range, not a published commitment | TopFunders.ai, What Business Financing Costs | Last verified September 6, 2026 |
| SBA 7(a), variable rate | 10.0% to 13.5% (prime plus 3.0% to 6.5%, by loan size) | Published cap, a ceiling not a quote | SBA, terms, conditions and eligibility | October 2026, at prime 7.00% |
| SBA 7(a), fixed rate | 12.0% to 15.0% (prime plus 5.0% to 8.0%, by loan size) | Published cap, a ceiling not a quote | SBA maximum fixed rate spreads (Federal Register, August 1, 2022), still in effect October 2026 | October 2026, at prime 7.00% on October 1 |
| SBA microloan (up to $50,000) | Generally 8% to 13% | Published range, not a cap. The SBA says "generally" | SBA microloans page | Read October 4, 2026 |
| Online term loan | 15% to 45% APR | Typical range, not a published commitment | TopFunders.ai, What Business Financing Costs | Last verified September 6, 2026 |
| Business line of credit | Priced like an online term loan, typically 15% to 45% APR, plus fees | Typical range, not a published commitment | TopFunders.ai, What Business Financing Costs | Last verified September 6, 2026 |
| Merchant cash advance | Factor rates of roughly 1.1 to 1.5, about 40% to 350% APR equivalent | Typical range, not a published commitment | TopFunders.ai, What Business Financing Costs | Last verified September 6, 2026 |
The bank survey medians sit near the bottom of the 6% to 20% typical range because a median is the middle rate banks reported for established small firms, while the range covers the full spread of bank offers. SBA 504 pricing is not in the table because we have no verified published figure for it. SBA 504 Loan: How It Works, Rates and Terms (2026) explains the program.
Why did business loan rates go up in September 2026?
The Federal Reserve raised its target range by 0.25 point on September 16, 2026, to 3.75% to 4.00%, its first increase since 2023. The bank prime rate followed, rising from 6.75% to 7.00% on September 17, 2026.
That matters most for variable rate loans, which are priced as prime plus a spread. When prime rises, their rate rises with it, including SBA 7(a) variable rate loans. On the same spreads, the variable cap range moved from 9.75% to 13.25% at prime 6.75% to 10.0% to 13.5% at prime 7.00% (derived). A fixed rate loan keeps the rate set at closing.
The Kansas City Fed figures above were collected before the hike, so they show bank rates before prime rose, not after. This page reports what happened and the date of each figure. It makes no forecast.
What are the SBA 7(a) maximum rates?
As of October 2026, with prime at 7.00%, the SBA caps variable rate 7(a) loans at 10.0% to 13.5% and fixed rate loans at 12.0% to 15.0%, depending on loan size. A cap is a ceiling the lender cannot exceed, not a quote, and a lender can offer less.
SBA 7(a) maximum variable rate by loan size, October 2026
| Loan amount | Maximum spread over prime | Maximum rate at prime 7.00% (published cap, October 2026) |
|---|---|---|
| $50,000 or less | Prime plus 6.5% | 13.5% |
| $50,001 to $250,000 | Prime plus 6.0% | 13.0% |
| $250,001 to $350,000 | Prime plus 4.5% | 11.5% |
| Over $350,000 | Prime plus 3.0% | 10.0% |
SBA 7(a) maximum fixed rate by loan size, October 2026
| Loan amount | Maximum spread over prime | Maximum fixed rate for October 2026 (published cap) |
|---|---|---|
| $25,000 or less | Prime plus 8.0% | 15.0% |
| $25,001 to $50,000 | Prime plus 7.0% | 14.0% |
| $50,001 to $250,000 | Prime plus 6.0% | 13.0% |
| Over $250,000 | Prime plus 5.0% | 12.0% |
Variable caps move whenever prime moves. Fixed caps use prime on the first business day of the month, so they reset monthly: October 2026 uses 7.00% from October 1.
Since March 1, 2026, lenders may use other base rates, including the SBA optional peg rate, 5 year and 10 year Treasury rates and SOFR, but the maximum is still prime plus the spread. The cap covers the interest rate. The SBA's upfront guaranty fee is separate.
SBA 7(a) Loan Requirements, Rates and Terms (2026) has the terms, fees and requirements, and SBA Loans: Which Program Fits Your Business? compares 7(a) with Express, 504 and microloans. SBA Microloans: Who They Actually Suit, and Who They Don't covers the smaller loans.
What is a good interest rate on a business loan?
A good rate is a low one for the kind of lender you can get, so compare it with that lender type, not the whole market. It also depends on what the money earns.
- A bank: a rate near the survey medians (7.0% urban, 6.7% rural, second quarter of 2026, before prime rose to 7.00%).
- An SBA lender: under the cap for your loan size and rate type, which is the most a lender may charge.
- An online lender: toward the low end of the typical 15% to 45% APR range, with the fees in dollars beside it.
- A merchant cash advance: skip the rate and compare the total repaid in dollars.
The same interest cost can suit a purchase that pays for itself quickly and be a poor deal for idle money. Lenders price each business separately, so no table can tell you your rate.
What moves your rate?
Lender type moves it most. Within a type, time in business, deposit consistency, whether an asset secures the loan, existing obligations, personal credit, industry, term and amount all play a part.
Time in business is the strongest signal, and steady monthly deposits read as lower risk than the same annual total arriving in a few lumps. A secured loan usually costs less than one with nothing behind it. Personal credit counts, but less than most owners expect.
What Business Financing Costs ranks these drivers, and What Do Lenders Look for When Approving a Business Loan? explains how lenders weigh them.
What is the interest on a $50,000 business loan?
It depends on the rate and the term, and the rate depends on the lender type. At example rates, the interest on $50,000 over 3 years is $6,405 at 8%, $9,786 at 12% and $16,894 at 20%, and over 2 years at 30% it is $17,095.
Interest on a $50,000 loan at example rates
| Example only, not an offer, equal monthly payments, fees left out: rate and term | Monthly payment | Total interest |
|---|---|---|
| 8% over 3 years (example rate) | $1,567 | $6,405 |
| 12% over 3 years (example rate) | $1,661 | $9,786 |
| 20% over 3 years (example rate) | $1,858 | $16,894 |
| 30% over 2 years (example rate) | $2,796 | $17,095 |
For $50,000, the October 2026 SBA 7(a) cap is 13.5% variable and 14.0% fixed (published caps), against typical ranges of 6% to 20% APR at banks and 15% to 45% APR online (last verified September 6, 2026). Fees are extra. The Business Loan Calculator: Monthly Payments and How Much You Can Borrow runs your own amount, rate and term.
What is the payment on a $1,000,000 business loan?
It is $13,215 a month over 10 years at 10%, and $21,247 over 5 years at 10%. The 10% is the October 2026 SBA 7(a) variable cap for loans over $350,000 (a published cap, not a quote), used as an example rate. Both payments are examples, not offers, and fees are extra.
The longer term cuts the payment by about $8,000 a month (derived) and raises the total interest. The Business Loan Calculator: Monthly Payments and How Much You Can Borrow shows total interest at other rates and terms.
Is a lower rate always cheaper?
No. Fees change the cost. On $100,000 over 5 years, a 6% loan with a 4% fee costs $19,997 in total, and a 7% loan with a 1% fee costs $19,807.
Fee against rate, $100,000 over 5 years
| Example only, not an offer, equal monthly payments, fee deducted upfront, derived by TopFunders.ai | Monthly payment | Interest | Fee | Total cost | Effective APR (derived) |
|---|---|---|---|---|---|
| 6% rate, 4% fee | $1,933 | $15,997 | $4,000 | $19,997 | 7.71% |
| 7% rate, 1% fee | $1,980 | $18,807 | $1,000 | $19,807 | 7.42% |
The 6% offer looks a point cheaper and costs $190 more in total (derived), because the fee comes out of the amount you receive: you repay $100,000 and receive $96,000. The effective APR folds the fee and the interest into one yearly rate. Compare the effective APR or the total cost in dollars, never the rate alone.
How to compare business loan offers lists what to ask each lender, and What Business Financing Costs explains why a lower rate does not always mean a cheaper loan.
Do borrowers end up paying more than they expected?
Often, and most at online lenders. In the Federal Reserve Banks' 2026 Small Business Credit Survey, 60% of borrowers at online lenders said their costs came in higher than expected, against 32% at large banks.
Share of borrowers whose costs came in higher than expected
| Lender type | Share reporting costs higher than expected (survey of borrowers, 2026 Report on Employer Firms, fielded September to November 2025) |
|---|---|
| Online lenders | 60% |
| Finance companies | 44% |
| Small banks | 37% |
| Large banks | 32% |
The shares measure surprise, not price. Ask for every fee in dollars before you sign, along with the total you repay and whether the quoted APR includes fees.
Frequently asked questions
What is the current prime rate?
It is 7.00% as of October 2026 (Federal Reserve H.15, release of October 2, 2026). It rose from 6.75% on September 17, 2026, after the Federal Reserve raised its target range to 3.75% to 4.00% on September 16.
What is a good interest rate on a business loan?
One that is low for the lender type you can get: bank medians of 7.0% urban and 6.7% rural in the second quarter of 2026, an SBA variable cap of 10.0% to 13.5% as of October 2026, or the low end of the typical 15% to 45% APR online. For an advance, compare the total repaid.
What is the interest rate on a $50,000 business loan?
It depends on the lender type. As of October 2026 the SBA 7(a) variable cap for $50,000 is 13.5% (a published cap), while banks typically run 6% to 20% APR and online lenders 15% to 45% APR (typical ranges). At example rates, interest over 3 years is $6,405 at 8%, $9,786 at 12% and $16,894 at 20%.
What are SBA loan rates right now?
As of October 2026, with prime at 7.00%, SBA 7(a) variable rates are capped at 10.0% to 13.5% and fixed rates at 12.0% to 15.0%, by loan size (published caps). The SBA says microloans are generally 8% to 13%.
Are business loan rates going up?
They rose in September 2026: the Federal Reserve raised its target range on September 16, and prime went from 6.75% to 7.00% on September 17. We do not forecast what rates do next, so check the date on each figure.
Why is my business loan rate higher than the prime rate?
Prime is the base, not the price. A lender adds a spread for risk, speed and the profile of the business, and fees can lift an APR above the stated rate.
How hard is it to get a $100,000 loan?
It depends mostly on revenue, because a lender wants to see that your deposits can carry the payments. Equipment financing can reach large amounts on less revenue when the money buys an asset, and SBA 7(a) loans open up if you can wait. At an example 10% over 5 years, $100,000 costs $2,125 a month. What does it take to borrow $100,000 for your business? covers what lenders weigh.
Want to see what a partner would offer your business?
A table cannot tell you your rate, because lenders price each business separately. Answer a few questions and see the lending partners ready to make your business an offer. Checking your options doesn't affect your credit. TopFunders.ai is not a lender and not a loan broker, and the partners you see depend on your answers.
See the lending partners ready to make your business an offer
TopFunders.ai is not a lender, not a loan broker, and does not originate, underwrite, price or fund loans. We make no credit decisions. A match is not an approval: each partner makes its own decision and sets any amount, rate and terms. Rates on this page are published caps, survey medians or typical ranges, each labelled and dated, and none is an offer or a quote. Prime and lender terms change, so check the date on each figure. Payments and costs shown are examples with fees left out unless the table says otherwise.
Sources
- Prime rate 7.00%: Federal Reserve, Selected Interest Rates (H.15), release of October 2, 2026. Daily series, 7.00% as of October 1, 2026
- Federal Reserve press release, September 16, 2026 (target range raised 0.25 point to 3.75% to 4.00%)
- Kansas City Fed, Small Business Lending Survey, second quarter 2026, released September 24, 2026
- SBA, 7(a) terms, conditions and eligibility (variable rate spreads)
- SBA maximum fixed rate spreads (still in effect October 2026), Federal Register, August 1, 2022
- SBA base rate change effective March 1, 2026, Federal Register, February 10, 2026
- SBA, microloans, read October 4, 2026
- Federal Reserve Banks, Small Business Credit Survey, 2026 Report on Employer Firms (fielded September to November 2025)
- Typical ranges for bank, online, line of credit and advance pricing: What Business Financing Costs, figures last verified September 6, 2026
- Example payments and interest: Business Loan Calculator: Monthly Payments and How Much You Can Borrow
- Fee against rate example: computed by TopFunders.ai from standard amortization, equal monthly payments, fee deducted upfront