Understanding business loan interest rates is essential for choosing the right financing. Rates vary dramatically depending on the product type, your credit profile, and time in business. This guide breaks down current rates across every major business funding product so you can make an informed decision.
| Product | Rate Range | Term | Best For |
|---|---|---|---|
| SBA 7(a) Loan | 6.5% – 13% APR | Up to 25 years | Established businesses |
| Bank Term Loan | 7% – 15% APR | 1-10 years | Strong credit, 2+ years |
| Business Line of Credit | 8% – 25% APR | Revolving | Ongoing cash flow needs |
| Equipment Financing | 4% – 20% APR | 2-7 years | Equipment purchases |
| Short-Term Loan | 15% – 80% APR | 3-18 months | Urgent capital needs |
| Merchant Cash Advance | 1.1 – 1.5 factor rate | 3-18 months | Fast funding, any credit |
| Invoice Factoring | 1% – 5% per invoice | Per invoice | B2B with unpaid invoices |
Several factors determine the rate you receive: credit score (higher scores = lower rates), time in business (longer track record = better terms), monthly revenue (stronger revenue = more options), industry risk (some industries are considered higher risk), and collateral (secured loans offer lower rates).
The best strategy is to compare offers from multiple lenders. Lending Valley’s marketplace model does exactly this — one application connects you with competing offers from 75+ lenders, ensuring you see the best rates available for your profile.
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