SBA Sets October Interest Rates for Small Business Loans
Published Date: 10/1/2026
Notice
Summary
The Small Business Administration set the Optional Peg Rate at 5.00% for October to December 2026, which affects SBA direct and guaranteed fluctuating interest rate loans. Third Party Lenders funding 504 projects must keep their commercial loan rates within legal limits, capped at 6% above the New York Prime rate or state law limits. These changes help small businesses plan their loan costs for the upcoming quarter.
Analyzed Economic Effects
2 provisions identified: 1 benefits, 0 costs, 1 mixed.
Cap on 504 Project Commercial Loan Rates
If a Third Party Lender makes a commercial loan that funds any portion of a 504 project, the maximum legal interest rate is capped at 6% over the New York Prime rate. If that 6%-over-Prime level would exceed the maximum allowed by a State's constitution or laws, the lender must instead use the State's maximum interest rate.
Optional Peg Rate set at 5.00%
If you have an SBA direct loan or a guaranteed fluctuating-rate SBA loan, the Small Business Administration set the Optional Peg Rate at 5.00% for the October–December quarter of Fiscal Year 2027. The notice says this rate is a weighted average cost of money and may be used as the base rate for guaranteed fluctuating interest rate SBA loans.
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