Why Rates Are Rising
War-related inflation, supply chain pressure, and central bank policy have pushed interest rates higher. For businesses planning to borrow, that means the cost of capital is increasing. SBA 7(a) and 504 loans offer fixed rates that lock in your cost for the life of the loan. Securing approval now can protect you from further rate increases.
Benefits of Locking In Now
Once you close an SBA loan, your rate is fixed. Future rate hikes don’t affect your payment. If you expect rates to rise further, locking in now effectively captures today’s cost. SBA loans also offer longer terms than many alternatives, which can lower monthly payments.
SBA 7(a) vs 504
SBA 7(a) loans can fund working capital, equipment, and real estate. SBA 504 loans focus on fixed assets like real estate and major equipment. Both offer fixed rates. Compare the two to match your use of funds. See 7(a) vs 504 for details.
When to Wait
If your business isn’t ready (e.g., weak cash flow, missing documentation, or unclear use of funds), rushing can lead to denial or unfavorable terms. Fix those first. If you have time and a solid application, locking in now can make sense. Lines of credit may have variable rates; equipment financing often has fixed rates too. Weigh all options.
Final Thoughts
War-related inflation is pushing rates higher. Locking in an SBA loan now can secure today’s rate before further increases. If you’re ready to borrow, it may be a good time. Get matched with SBA lenders to explore your options.