Understanding current business loan rates helps you evaluate offers and negotiate effectively. Here's a comprehensive rate guide across all major lending categories.
Business Loan Rate Landscape in 2025
Business loan rates in 2025 reflect an interest rate environment shaped by the Federal Reserve's 2022–2023 rate-hiking cycle and subsequent easing that began in late 2025. The Wall Street Journal Prime Rate — the benchmark for most SBA and many conventional loans — sits in the 7.5% range as of mid-2025, down from its 2023 peak but still elevated compared to the 2020–2022 period. This translates to all-in loan rates that are higher than the recent historical low, but still well within normal historical ranges for small business financing.
SBA Loan Rates
SBA 7(a) loans are priced at the WSJ Prime Rate plus a lender spread. The SBA sets maximum spread limits by loan size and term:
- Loans over $350,000, terms over 7 years: Prime + 2.75% max spread
- Loans $50,001–$350,000, terms over 7 years: Prime + 3.25% max
- Loans under $50,000: Prime + 4.75% max
With Prime at approximately 7.5%, most SBA 7(a) borrowers are seeing all-in rates of 10.25%–14.5% APR depending on loan size and term. SBA 504 loans (for fixed assets and real estate) are tied to U.S. Treasury rates and currently run 6%–9% for the CDC portion — making them the cheapest fixed-rate small business financing available. Learn more in our complete SBA 7(a) guide and our SBA 504 loan guide.
Traditional Bank Loan Rates
Conventional bank term loans and lines of credit for qualified borrowers (650+ FICO, 3+ years in business, $500,000+ annual revenue) currently range from 7%–15% APR. Bank lines of credit for similar profiles run 8%–16% APR. These rates vary significantly based on:
- Credit score — a 720 FICO borrower might see 8%; a 660 borrower might see 13%
- Collateral — secured loans carry lower rates than unsecured
- Loan term — shorter terms generally mean better rates
- Banking relationship — existing customers with deposit accounts often receive preferred pricing
- Industry — some industries (restaurants, cannabis-adjacent, staffing) carry risk premiums
Online/Fintech Lender Rates
Online lenders such as Fundbox, OnDeck, Bluevine, and others typically charge 20%–50% APR for term loans and 15%–35% for lines of credit. These higher rates reflect faster approvals, looser qualification requirements, and the higher credit risk they accept. The tradeoff is clear: you pay for speed and accessibility. A $100,000 term loan at 30% APR over 2 years carries monthly payments of approximately $5,600 and total interest of about $35,000.
Revenue-Based Financing / Merchant Cash Advance Rates
Revenue-based financing uses factor rates rather than APR. Common factor rates range from 1.10–1.50. Converted to APR:
| Factor Rate | Repayment Period | Equivalent APR |
|---|---|---|
| 1.15 | 12 months | ~30% |
| 1.25 | 9 months | ~55% |
| 1.30 | 6 months | ~100% |
| 1.45 | 4 months | ~270% |
The effective rate depends heavily on repayment speed, which is driven by your revenue volume. Use our business loan calculator to model the true cost of any financing offer before accepting.
Equipment Financing Rates
Equipment loans are typically priced at 5%–25% APR depending on lender type, equipment type, credit profile, and loan-to-value ratio. Bank equipment financing for qualified borrowers runs 5%–12% APR. Online equipment lenders run 8%–25%. Manufacturer financing programs sometimes offer promotional 0%–6% rates. The equipment's value as collateral generally keeps rates lower than unsecured working capital loans for the same credit profile.
Factors That Determine Your Specific Rate
Your rate is determined by a combination of factors that lenders weigh simultaneously:
- Personal credit score: The single most important factor for most products — a 720 FICO vs. a 620 FICO can mean a 5–8% rate difference
- Business credit score: PAYDEX and Experian Business scores gain weight as your business matures
- Time in business: Businesses over 3 years with stable revenue receive meaningfully better rates than younger businesses
- Annual revenue and growth trend: Growing revenue signals lower risk to lenders
- Debt Service Coverage Ratio: Higher DSCR means lower perceived repayment risk
- Industry: Some industries carry rate premiums due to higher historical default rates
- Collateral: Secured loans always price better than unsecured for equivalent credit profiles
- Loan term: Shorter terms reduce lender risk and often price better
How to Get the Best Rate Available to You
The most effective rate improvement strategies: pay down revolving credit balances to below 30% utilization (fastest FICO improvement), establish at least 2 years of clean bank statement history, reduce your existing debt service to improve DSCR, and work with a marketplace like Approvd that submits your profile to 75+ competing lenders simultaneously. Competition among lenders is the most reliable mechanism for finding your best available rate — a single lender quote gives you no negotiating leverage.
Approvd's advisors present all offers with APR calculations included, so you can compare rates across different product types on equal footing. Apply free in 5 minutes to see your actual rate options today.
Frequently Asked Questions
What is a good interest rate for a small business loan?
In 2025, a "good" rate depends on the product: below 12% for SBA loans is excellent; 15–22% for online term loans is competitive; anything below 1.20 factor for revenue-based financing is favorable. Any rate that produces a positive ROI on your specific use of funds is "good" by the most important measure.
Are business loan rates fixed or variable?
SBA 7(a) loans can be fixed or variable (tied to Prime Rate). Bank loans can be either. Online lenders typically offer fixed rates. Revenue-based financing uses fixed factor rates. For predictability, fixed rates are preferable — especially in a rising-rate environment.
Related Financing Product
Business Term Loans
Get a lump-sum business loan with fixed payments from $10K–5M.