SBA 7(a) Loan Rates 2026: 3,977 Real Estate Loans, 8.25% Median

What the 7(a) rate is made of

Unlike the SBA's 504 loan, whose fixed rate is set at a monthly debenture sale (see our SBA 504 loan rates page), a 7(a) loan is a single bank loan with a government guarantee, and the bank prices it. The SBA's lender page says: “Interest rates for 7(a) loans are negotiated between the borrower and the lender, but are subject to SBA maximums, which are pegged to the prime rate or an optional peg rate.” Rates may be fixed or variable; for variable loans the regulation allows a base rate of the prime rate or the SBA Optional Peg Rate, with changes no more often than monthly (13 CFR 120.214), and SOP 50 10 8.1, effective October 1, 2026, also allows SOFR or the 5-year or 10-year Treasury as an alternative base with the cap still measured against Prime.

The 7(a) terms that matter for a building (13 CFR 120; SBA lender page; SOP 50 10 8.1; Notice 5000-881797)

The SOP's wording on occupancy is plain: “For an existing building, the Applicant must occupy 51% of the Rentable Property and may lease to a third party up to 49%.” Together with the passive-business exclusion this is why 7(a) is a loan for an owner-occupier and not for an investor, a point we come back to below.

What the SBA's loan file shows

The SBA publishes every 7(a) loan it has guaranteed in its 7(a) & 504 FOIA dataset, updated quarterly. We downloaded the FY2000-FY2009, FY2010-FY2019 and FY2020-present 7(a) files on October 22, 2026; every row carries the AsOfDate 2026-06-30. The data dictionary defines the rate field as the “Initial interest rate - total interest rate (base rate plus spread) at time loan was approved.” The file has no use-of-proceeds field, so, as in our commercial real estate loan calculator and the 504 page, we use the term as the proxy: a 7(a) term of 300 months (25 years) or more is the maturity the regulation reserves for real estate. Our counts exclude loans with status CANCLD. The proxy misses loans where real estate is mixed with working capital and carries a shorter term (362 FY2026 loans had terms of 240 to 299 months), and it can include other long-lived assets, so treat the totals as the core of the real-estate market, not all of it. Rates are in the file only from FY2009 on.

7(a) loans with terms of 300 months or more, by fiscal year (net of cancelled loans, SBA FOIA file as of June 30, 2026)

FY2026 is a partial year with no approvals dated October 2025 in the file. Against the same nine months a year earlier (October 1, 2024 to June 30, 2025) the file shows 4,628 real-estate-term loans and $7,264,983,700; the current window is 14.1% lower in loans and 4.1% lower in dollars (our arithmetic). All 7(a) loans fell more: 35,641 against 50,216 in the same window, or 29.0% fewer (our arithmetic). Real-estate-term lending held up better than the small loans that make up most of the program: the median loan in the file for all FY2026 7(a) loans is $200,000, while the real-estate-term median is $1,300,000. The median rate in the file stepped from 5.50% in FY2022 to 9.00% in FY2023 and has since eased to 8.25%.

Fixed or variable, and how far over Prime

Of the 3,977 FY2026 real-estate-term loans, 3,403 (85.6%) were variable and 574 (14.4%) fixed. The variable loans were larger in total ($6,203,941,700 against $763,910,600) and had a higher median rate.

FY2026 real-estate-term loans by rate type (InitialInterestRate, SBA FOIA file as of June 30, 2026)

A fixed rate looks cheaper in this file, but the comparison is not like for like: the file says a loan is fixed or variable and nothing about how long a fixed rate lasts, and some large banks write mostly fixed-rate loans (Wells Fargo Bank wrote 115 real-estate-term loans, 9.6% variable, with a median rate of 6.31%). Ask for the note, not the flag.

To see the lenders' margin we subtracted the Bank Prime Loan Rate (FRED series DPRIME) on the approval date from each variable loan's initial rate (our arithmetic). Some lenders use SOFR, Treasury or peg bases, so this is a comparison with Prime and not the contract spread. The pattern is clear by size.

FY2026 variable-rate loans over Prime, by size (real-estate-term loans, our arithmetic)

No FY2026 real-estate-term loan was $50,000 or less. In the two smaller bands no variable loan priced at the cap (4.5 and 6.0 points); over $350,000, where the cap is 3.0 points, 5.5% did, and the share at the cap has risen from 0.1% in FY2022 to 2.4% in FY2023, 5.6% in FY2024, 6.4% in FY2025 and 5.5% in FY2026 (our arithmetic). The middle half of variable loans over $350,000 sat between 1.00 and 2.25 points over Prime.

By approval month the median rate on variable loans over $350,000 followed Prime, which was 7.00% from October 30, 2025, 6.75% from December 11, 2025 and 7.00% again from September 17, 2026 (FRED).

FY2026 variable real-estate-term loans over $350,000, by approval month

Because Prime has moved up 0.25 points since the last approval date in the file, a new variable loan at the same 1.50-point margin would start at 8.50% (our arithmetic), and the 10.00% ceiling is the cap on a loan over $350,000 today.

Who made the loans

The file names 416 lenders with a real-estate-term loan in FY2026. It is not concentrated: the top 10 had 39.6% of the dollars, the top 25 had 58.7% and the largest, Live Oak Banking Company, had 10.0% (our arithmetic). The file's BankName is, in the dictionary's words, “the name of the bank that the loan is currently assigned to,” so a lender that was bought or merged may appear under its new name.

The 12 largest lenders of FY2026 real-estate-term loans (names as in the SBA file; our arithmetic from the file)

Three things stand out. First, two kinds of lender: specialists for whom a building loan is almost the whole business (Harvest, 99.0% of its FY2026 loans; Enterprise Bank & Trust, 89.4%) and large banks for which it is a small line (Huntington, 4.6% of 2,471 loans; U.S. Bank, 9.0% of 2,054). Second, the median rate by lender is not a price list: it reflects loan size, the base rate each lender uses and the fixed or variable mix, so Harvest's 9.50% (a median loan of $742,500) and GBank's 8.00% (a median loan of $4,179,000) are not like for like. Third, the leaders move: in the whole of FY2025 the top five by real-estate-term dollars were Live Oak ($1,135,589,700), The Huntington National Bank ($490,807,900), GBank ($479,502,800), Harvest ($390,953,000) and U.S. Bank ($342,834,100). Readycap Lending, the SBA lender of Ready Capital (see our Ready Capital review), was sixth in FY2025 with $324,620,600 and 29th in FY2026 with $43,131,000.

What the real-estate-term loans financed in FY2026 (NAICS description and project state, our arithmetic)

Of the 3,977 loans, 553 went to start-ups whose loan funds will open the business, 762 to businesses two years old or younger, and 704 were changes of ownership; 3,705 were processed under the Preferred Lenders Program. All 3,977 report collateral.

The fees, line by line

The SBA's Information Notice 5000-881797, published September 3, 2026, sets the 7(a) fees for loans approved from October 1, 2026 to September 30, 2027. The upfront fee is charged on the guaranteed portion and the lender is permitted to pass it to the borrower, according to the SBA's lender page; the annual service fee is the lender's cost: “Lenders may not pass the Lender’s Annual Service Fee on to the Borrower.” The fee tiers are the same as in FY2026 (Notice 5000-872051); what changed is the waiver, which for FY2027 covers loans of $700,000 or less to manufacturers, a list of food-supply-chain industries and businesses in a rural area, where FY2026 covered manufacturers only, up to $950,000.

7(a) fees for loans approved from October 1, 2026 (maturity over 12 months; Notice 5000-881797)

Here is the arithmetic for a building loan, using the 75% guaranty the SBA applies above $150,000.

Fees and payments on a 25-year 7(a) loan (our arithmetic; payments are level-payment estimates, not a quote)

The difference between the median and the cap on $1,000,000 is $1,202.51 a month, or $360,753 over 25 years if the rate sat at the cap the whole time (our arithmetic). The lender can also charge packaging fees and out-of-pocket costs under 13 CFR 120.221, plus legal fees on an hourly basis, so the SBA fee is not the whole closing cost; the bank's own fees, appraisal and title are not in any SBA document.

Can an investor use a 7(a) loan to buy a rental?

Not as a landlord. The ineligible list in 13 CFR 120.110 includes (c) “Passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds (except Eligible Passive Companies under § 120.111).” The exception is the structure many owner-occupiers use: a separate entity owns the building and leases all of it to the operating company. Under 13 CFR 120.111 that company must use the proceeds only for property it leases to one or more operating companies, the lease must be in writing and subordinate to SBA's lien, the rent cannot exceed the loan payment plus the holding costs, the lease term must be at least as long as the loan, the operating company must be a guarantor or co-borrower, and every holder of 20% or more of either company must guarantee the loan. The operating company must also occupy 51% of an existing building, so the tenant has to be that operating business. A building rented to outside tenants for income is outside the program; the SOP's restrictions on uses of proceeds list “Investments in real or personal property acquired and held primarily for future development, sale, lease, or investment” among the purposes loan proceeds may not be used for, except for a loan to an Eligible Passive Company.

The loan file shows how rarely lessors appear. It does not flag Eligible Passive Companies, and the NAICS code on a loan may be the operating company's, so these counts show what the SBA's data labels as lessors, not how many landlords the program funds.

7(a) loans coded as lessors of buildings (NAICS 5311xx), net of cancelled loans, SBA FOIA file as of June 30, 2026

The drop after FY2023 is sharp, and the file does not say why; a change in how lenders code the borrower is as possible as a change in lending, so we do not read it as policy. Lessors of self-storage units (531130) are different: they are operating businesses, and 69 of them received 7(a) loans in FY2026 for $119,693,200, 56 with real-estate terms. If your goal is to own rental property, the loans built for it are covered in our investment property loans guide and our minimum DSCR by program page, which sets out the SBA's coverage ratio beside the investor lenders'.

7(a) or 504 for a building

Both programs require the business to occupy the building. The 504 is two loans: a bank first lien and a CDC/SBA second lien, with the CDC piece up to 40% of the project at a rate fixed at the monthly debenture sale. SomerCor, a CDC, published 6.97% for 25 years at the October 8, 2026 sale, with CDC, SBA and servicing fees included; the next sale prices on November 5, 2026, and the details are on our SBA 504 page. The 7(a) is one loan, up to $5,000,000, with 85% or 75% guaranteed, and the file shows it priced mostly as a variable-rate loan at a median 8.25% to 8.35%. The two numbers are not interchangeable: the 504 rate covers only about 40% of the project and the bank's first lien is priced separately, while the 7(a) rate covers the whole loan. Compare the all-in monthly payment on the same project from both structures, with the fees from the tables above and on the 504 page, and compare both with the bank and CMBS rates in our commercial real estate loan rates page.

What the file says about losses

The file records charge-offs, with limits. LoanStatus is as of June 30, 2026, and “EXEMPT” covers loans that “have been disbursed but have not been cancelled, paid in full, or charged off,” which the SBA withholds under FOIA Exemption 4, so the share with a visible status shrinks for recent vintages. We computed charge-offs for all 7(a) terms, not just real estate, because the term field cannot isolate real-estate losses: in the FY2010 to FY2014 vintages, 5 of 21,164 loans with a 300-month term were charged off (0.02%), against 453 of 8,555 at 240 to 299 months (5.30%), a gap too large to be credit performance, so we do not publish a real-estate loss rate.

All 7(a) loans charged off, by approval year (net of cancelled loans; status as of June 30, 2026)

Read the table as a range, not a forecast: the 2007 vintage had charge-offs equal to 23.9% of its approved dollars, the 2010 to 2019 vintages 2.2% to 4.7%, and the recent vintages cannot be judged because most of their loans are still hidden or young.

What this data cannot tell you

• No use of proceeds. The 300-month proxy is ours; a loan with a shorter term can include a building and a 300-month loan can include other assets.
• Approval, not closing. 1,198 of the 3,977 loans were still undisbursed (COMMIT) at June 30, 2026 and some will be cancelled; the status of 2,777 more is hidden as EXEMPT.
• Initial rate only. The variable rate resets, and the file does not show the base, the margin, the floor, the ceiling or how long a fixed rate lasts.
• Spread over Prime is ours. It is the initial rate minus Prime on the approval date; loans using SOFR or Treasury bases show a different number from their note margin.
• Lender names are current assignments. A loan sold or transferred shows the new holder.
• Fees on the borrower. The SBA fee is in the notice, but packaging, appraisal, environmental and legal fees are the lender's and not in the file.

What a reader can do with this

1. Ask which base rate and margin. Prime plus 1.50 was the median on a variable loan over $350,000 and the cap is Prime plus 3.0; ask the lender for the margin in writing and compare at least two.
2. Price the whole thing. Use the fee table: on $1,000,000 the SBA's upfront fee is $26,250, which the lender may pass to you, plus the lender's own fees.
3. Compare with a fixed quote. The file's fixed-rate median is 6.99%, but check how long the rate is fixed, the prepayment fee schedule (5%, 3%, 1% in years 1 to 3 on larger prepayments of loans of 15 years or more) and the SBA's fixed-rate maximum.
4. Check the 51% rule before you look at rates. An existing building must be 51% occupied by your business; new construction 60%.
5. If the building is for rent, stop here. Use the Eligible Passive Company structure only when the tenant is your own operating business; otherwise see the investor loans linked above.
6. Pick a lender that does this often. The file names 416; look at who is active in your state and size band in the CSV and ask them for a term sheet.

FAQ

Sources, read on October 22, 2026: SBA 7(a) & 504 FOIA data (data.sba.gov/dataset/7a-504-foia), files FOIA_7a_FY2000_FY2009, FOIA_7a_FY2010_FY2019 and FOIA_7a_FY2020_Present, all as of June 30, 2026, and the 7(a) and 504 FOIA data dictionary (our scripts sba7a_foia_analysis.py and sba7a_foia_analysis2.py and their output are in the data folder); 13 CFR Part 120, §§ 120.110, 120.111, 120.212, 120.214 and 120.221 (eCFR, as of October 20, 2026); SBA lender page “Terms, conditions and eligibility for loans” (sba.gov); SBA SOP 50 10 8.1, effective October 1, 2026; SBA Information Notices 5000-881797 (7(a) fees for FY2027) and 5000-872051 (7(a) fees for FY2026); FRED series DPRIME (Bank Prime Loan Rate, through October 13, 2026); SomerCor's October 2026 SBA 504 rate page (a CDC's published figure, not an SBA document). All counts, medians, shares, spreads, changes, fees and payments are our arithmetic. This is analysis of public documents, not investment, legal, lending or tax advice, and not a loan offer.