SBA loan programs
SBA microloan: the rate ceiling and what a small loan really costs
Microloans of up to $50,000 are made by nonprofit intermediaries with money SBA lends them. Their rate cap follows a formula; the calculator applies it.
Independent site, not a lender and not affiliated with the U.S. Small Business Administration. Loans are applied for only with an SBA lender.
SBA microloan: highest rate allowed and payment
Example, not your result yet· change a figure to see yours
Highest rate the intermediary may charge
11.25%
| Margin allowed | 7.75 points (over $10,000) |
| Your rate | 10.00% |
| Monthly payment | $463 |
| Interest over the term | $8,347 |
13 CFR 120.707. 7 years at most. Fees and required training are set by each intermediary and are not included.
An SBA microloan is a loan of up to $50,000, repaid within 7 years, made by an intermediary, usually a nonprofit community lender, that borrows the money from SBA. It can pay for working capital, materials, supplies, furniture, fixtures and equipment, but not real estate or existing debt. The rate is set by the intermediary, under a ceiling written into 13 CFR 120.707: the rate the intermediary pays SBA plus 7.75 points on loans over $10,000, or plus 8.50 points on $10,000 or less. The intermediary’s own rate follows the 5-year Treasury: on a new SBA loan it is that yield rounded to the nearest eighth, less 1.25 points. With the 5-year Treasury at 4.70% on November 2, 2026, that gives 3.50% and a ceiling of 11.25% on a $50,000 microloan. Older SBA loans to the intermediary carry their own rates, so the real ceiling varies from one lender to the next.
Fee notices read and loan file counted by Radif Partners · Editorial policy · Method and sources
The ceiling on common amounts
| Microloan | Highest rate allowed | Payment over 7 years | Interest at that rate |
|---|---|---|---|
| $5,000 | 12.00% | $88 | $2,414 |
| $10,000 | 12.00% | $177 | $4,828 |
| $15,000 | 11.25% | $259 | $6,740 |
| $25,000 | 11.25% | $431 | $11,234 |
| $50,000 | 11.25% | $863 | $22,468 |
Note the step at $10,000: a loan of $10,000 may carry 0.75 point more than one of $10,001. Specialized intermediaries, whose microloans average $10,000 or less, borrow from SBA at the Treasury rate less 2.00 points, so their ceiling is lower.
Microloan or SBA Express?
A $25,000 SBA Express loan over 7 years at today’s variable cap, 13.50%, costs $466 a month with its $250 guaranty fee financed. The microloan ceiling for the same amount is 11.25%, and there is no SBA guaranty fee, though the intermediary may charge its own fees and require training. The two are made by different lenders to different borrowers: a bank making an Express loan wants a credit history, while a microlender is set up for owners who do not yet have one. See SBA Express for the bank side.
What to ask an intermediary
Four questions settle the cost of a microloan. What rate does it pay SBA on the loan that funds yours, since that sets your ceiling? What rate and fees will it charge you, in writing? Is training or business advice required, and does it cost anything? And what collateral and personal guarantee does it require? The rule leaves those last points to the intermediary, which must still take into account its own rules and SBA’s on eligibility. Because the term can run to 7 years, a lower payment is possible on a longer term, at the price of more interest over the life of the loan.
What the SBA data does not show
SBA publishes its loan-level file for 7(a) and 504 loans, not for microloans, so this page cannot show what microloan borrowers actually paid. The figures above are the legal ceilings, computed from the rule and today’s Treasury rate; ask each intermediary for its rate, fees and the SBA rate it pays.