If you try to figure out what interest rate for small business loans is, you should understand what type of a small business loan you qualify. You can apply for:
- Installment loan when you gradually pay off a certain number of monthly payments along with fees and additional costs.
- The line of credit that works like a credit card. Together with a lender you define possible sum you can borrow and you can’t exceed the limit.
Current interest rate for small business loans will differ between two types of the loan. Furthermore, you will face different rates in different lending institutions and regions. Still, they don’t differ substantially. An average interest rate for a small business loan is:
- 5-9% for an installment loan.
- 1-8% for a line of credit.
These numbers don’t include the fees. They also vary from loan type to loan type, from one lending institution to another, etc. They also depend on your creditworthiness. A borrower with bad credit will face higher fees than fees for a person with better credit and stable income.
So, it becomes complicated to define an average interest rate for business loans. Rely on little guideline above but ask about possible fees, extra payments, and other tricky pitfalls beforehand.