SBA 7(a) Maximum Interest Rates and Guarantee Fees for FY2026

The cap dropped from 12.25% in October 2025 to 11.75% in January 2026 and stayed there through September. It only moves when prime moves, so a flat line means prime held steady.

Each step down in loan size adds a point to the ceiling. A borrower asking for $25,000 or less can legally be quoted up to 15%, while a borrower over $250,000 tops out at 12%.

Variable caps are a spread, not a fixed number. Your actual ceiling is whatever prime or the SBA peg rate is that day, plus these points, so it will rise if rates rise.

The fee is charged on the guaranteed portion, not the full loan amount. That matters because the SBA guarantees up to 85% of smaller loans and up to 75% of larger ones.

Working Capital Pilot loans price the fee by term instead of size. A loan of 12 months or less pays 0.25%, and the fee climbs to 1.35% at 49 to 60 months.

SBA 7(a) fee schedules compared: FY2025, FY2026 and FY2027 (loans with maturity over 12 months unless noted)

Source: U.S. Small Business Administration, SBA Information Notice 5000-858936: 7(a) Fees Effective October 1, 2024, for Fiscal Year 2025; U.S. Small Business Administration, Office of Capital Access, SBA Information Notice 5000-872051: 7(a) Fees Effective October 1, 2025 for Fiscal Year 2026 and 90-Day Rule Clarification; U.S. Small Business Administration, SBA Information Notice 5000-881797: 7(a) Fees Effective October 1, 2026 for Fiscal Year 2027 and 90-Day Rule Clarification. Download as image

SBA 7(a) maximum allowable fixed interest rates by month and loan size, FY2026 and October 2026 (%)

Source: U.S. Small Business Administration, 7(a) Fiscal Transfer Agent wiki, New Maximum Allowable Fixed Rate for 7(a) Loans (SBA_Max_Allowed_Fixed-Rates.xlsx, sheet 'Max Fixed Rates FROM 11-06-2018'). Download as image

How SBA sets the 7(a) interest rate ceilings

Source: U.S. Small Business Administration, Federal Register, Maximum Allowable 7(a) Fixed Interest Rates, 87 FR 46883 (FR Doc. 2022-16162); eCFR, Office of the Federal Register, 13 CFR 120.214 What conditions apply for variable interest rates?; U.S. Small Business Administration, 7(a) loan program: Terms, conditions and eligibility. Download as image

7(a) guaranty percentages and loan limits

Source: U.S. Small Business Administration, 7(a) loan program: Terms, conditions and eligibility. Download as image

What are SBA 7(a) interest rates right now?

Start with prime. In October 2026 the fixed base rate was 7%. The SBA then adds a maximum spread based on loan size: 8 points for $25,000 or less, 7 points for $25,001 to $50,000, 6 points for $50,001 to $250,000 and 5 points above that. That gives fixed-rate caps of 15%, 14%, 13% and 12%.

Variable loans work on a different scale. The cap is the base rate plus 6.5 points for loans of $50,000 or less, plus 6.0 for $50,001 to $250,000, plus 4.5 for $250,001 to $350,000 and plus 3.0 for anything over $350,000. The base rate can be prime or the SBA Optional Peg Rate.

Notice that the variable spreads are never wider than the fixed ones. On loans over $350,000 the gap is biggest: base rate plus 3.0 points variable, against prime plus 5 points fixed. A lender can accept a smaller margin when it can pass rate changes on to you. You pay for that with uncertainty. If prime climbs, so does your payment.

Across FY2026 the fixed cap for loans over $250,000 ranged from 12.25% down to 11.75%. The cap that applies to you is the one in effect when the SBA receives your application, so a delay in getting your application to the SBA while prime is rising can cost you.

A rate under the cap is not automatically a good rate. The cap is a legal limit, not a market price. Get quotes from two or three SBA lenders and compare the spread each one adds to prime. A difference of even one point, held over a long term, adds up to real money.

How much is the SBA guarantee fee in FY2026?

For loans with a maturity over 12 months, the upfront guarantee fee is 2% of the guaranteed portion on loans of $150,000 or less, 3% on loans of $150,001 to $700,000, and on loans of $700,001 to $5,000,000 it is 3.5% of the guaranteed portion up to $1M plus 3.75% on anything above that.

Compare that with FY2025. Back then, loans up to $1,000,000 carried a 0.00% upfront fee. A loan approved in September 2025 and the same loan approved in October 2025 could carry very different costs at closing. The FY2027 notice keeps the same fee tiers, so do not wait for the zero-fee year to return.

Short-term loans of 12 months or less pay 0.25%. Working Capital Pilot loans scale by term, from 0.25% up to 1.35%.

There is one large exception. Manufacturers in NAICS codes 31 to 33 pay 0% on 7(a) loans of $950,000 or less in FY2026 (MARC loans excluded). For FY2027 the 0% fee covers loans of $700,000 or less to manufacturers, listed food supply chain businesses and rural-area businesses. If your business might fit, ask the lender to confirm your code before the fee is quoted.

Who pays the SBA guarantee fee, you or the lender?

Technically the lender owes the upfront fee to the SBA. In practice it is passed to you, either paid at closing or added to the loan balance. If it is financed, you pay interest on it for the life of the loan.

The annual service fee is different. It is 0.55% of the outstanding guaranteed balance on every FY2026 7(a) loan, and lenders may not pass it on to the borrower. If your fee sheet shows an ongoing SBA servicing charge, ask what it is for. It may be a lender fee dressed up with an SBA label.

Then look at everything else on the closing statement. Packaging fees, broker fees, appraisal and environmental reports, legal fees and the lender's own origination charge are not part of the SBA guarantee fee. Each one should be listed, and you should know who agreed to it.

Is a smaller SBA loan more expensive?

On rate, often yes. A loan of $25,000 or less can carry a fixed rate up to 15%, against 12% for loans over $250,000. Part of the reason is that the paperwork costs a lender about the same no matter the size.

On fees, smaller loans come out ahead. The upfront fee is 2% of the guaranteed portion on loans of $150,000 or less, against 3% or more on larger loans. SBA Express loans to veteran-owned businesses carry a $0 upfront fee.

Take two owners. One borrows $25,000 to cover a slow season. The other borrows a bit over $250,000 to buy a building. The first can be quoted up to 15% fixed and pays the lowest fee tier. The second faces a 12% ceiling and the 3% fee. Neither one is getting a bad deal by default. They are buying different things.

So the honest answer depends on how long you keep the loan. Fees are paid once. Interest is paid every month. On a long equipment or real estate loan, a lower rate usually matters more than a lower fee. On a short working capital loan you plan to pay off early, the fee takes a bigger share of your total cost.

What to do before you sign

• Ask for the rate in writing as prime plus a stated spread, then check that spread against the SBA maximum for your loan size.
• If the rate is variable, find out which index it follows, how often it adjusts and whether there is any floor that stops it from falling.
• Get an itemized list of every fee and confirm which one is the SBA upfront guarantee fee and how it was calculated.
• Check the prepayment terms. On loans with a maturity of 15+ years, prepaying 25%+ in the first 3 years can trigger a fee of 5% in year 1, 3% in year 2 and 1% in year 3.
• Read the personal guarantee and collateral sections closely. SBA loans typically require owners to guarantee personally, and the lien may cover more than the asset you are buying.
• Look at default triggers beyond missed payments, such as a change in ownership or a drop in financial ratios, and what the lender can do when one happens.

Sources and method

Every number on this page comes from the sources below, each opened and read on or before October 18, 2026. A second, independent review checked every figure against its source and corrected anything that did not match. Figures that could not be confirmed were left out.

1. U.S. Small Business Administration, Office of Capital Access, SBA Information Notice 5000-872051: 7(a) Fees Effective October 1, 2025 for Fiscal Year 2026 and 90-Day Rule Clarification (August 28, 2025)
2. U.S. Small Business Administration, SBA Information Notice 5000-858936: 7(a) Fees Effective October 1, 2024, for Fiscal Year 2025 (July 23, 2024)
3. U.S. Small Business Administration, SBA Information Notice 5000-881797: 7(a) Fees Effective October 1, 2026 for Fiscal Year 2027 and 90-Day Rule Clarification (Published September 3, 2026; effective October 1, 2026)
4. U.S. Small Business Administration, 7(a) Fiscal Transfer Agent wiki, New Maximum Allowable Fixed Rate for 7(a) Loans (SBA_Max_Allowed_Fixed-Rates.xlsx, sheet 'Max Fixed Rates FROM 11-06-2018') (October 2026 update (posted October 6, 2026))
5. U.S. Small Business Administration, Federal Register, Maximum Allowable 7(a) Fixed Interest Rates, 87 FR 46883 (FR Doc. 2022-16162) (August 1, 2022)
6. eCFR, Office of the Federal Register, 13 CFR 120.214 What conditions apply for variable interest rates? (Current text, last amended August 1, 2022 (87 FR 38908))
7. U.S. Small Business Administration, 7(a) loan program: Terms, conditions and eligibility (Accessed October 18, 2026 (no date printed))
8. U.S. Small Business Administration, News release 25-80: SBA Waives Loan Fees for Small Manufacturers in Fiscal Year 2026 (September 18, 2025)