⚡ Quick Answer
The current U.S. prime rate is 6.75% as of March 2026, effective December 10, 2025. The prime rate = Federal Funds Rate + 3%. For SBA 7(a) loans, interest rates are capped at prime + 2.25% to prime + 6.5%, meaning current SBA loan rates range from 9.00% to 13.25% depending on loan size and term.
What Is the Prime Rate?
The prime rate is the interest rate that commercial banks charge their most creditworthy customers — typically large corporations with strong credit histories. It serves as the foundation for most variable-rate lending in the United States, including SBA loan interest rates, credit cards, home equity lines of credit, and adjustable-rate mortgages.
Here’s how the prime rate works in practice:
- Formula: Prime Rate = Federal Funds Rate + 3%. This spread has held steady since 1994.
- Who sets it: Each bank technically sets its own prime rate, but virtually all major U.S. banks move in lockstep with Federal Reserve decisions.
- Who publishes it: The Wall Street Journal (WSJ) surveys the 10 largest U.S. banks and publishes the consensus rate. When at least 7 of 10 banks change their rate, the WSJ Prime Rate updates. This is the benchmark referenced in most loan agreements.
- Current rate: 6.75%, effective December 10, 2025
- Based on: The Federal Open Market Committee’s (FOMC) current fed funds rate target range of 3.50%–3.75%
When the Federal Reserve raises or lowers the federal funds rate, the prime rate moves by the same amount — usually within one business day. This direct link is why Fed policy announcements matter so much to small business borrowers. Every quarter-point change flows directly through to your SBA loan payment.
Current Prime Rate — March 2026
As of March 2026, the U.S. prime rate stands at 6.75%. Here’s what you need to know right now:
- Current rate: 6.75%
- Effective date: December 10, 2025
- Last change: Decreased 0.25% from 7.00% after the FOMC’s December 2025 meeting
- Fed funds rate: 3.50%–3.75% target range
- Next FOMC meeting: March 18–19, 2026
- Duration at current level: Approximately 3 months
The January 28, 2026 FOMC meeting held rates steady, and markets are watching the March meeting closely for signals about the next move. The Fed has cut rates five times since September 2024, bringing prime down from 8.50% to 6.75%. Whether further cuts materialize depends on inflation data and economic conditions in the months ahead.
Complete Historical Prime Rate Table (1947–2026)
The prime rate has swung from a low of 1.75% in 1947 to an all-time high of 21.50% in December 1980. Understanding this history puts today’s 6.75% rate in perspective — and helps business buyers evaluate whether now is a good time to lock in SBA financing.
Key milestones in prime rate history:
- All-time high: 21.50% on December 19, 1980 — Paul Volcker’s Fed crushed inflation with aggressive rate hikes
- All-time low: 3.25% from December 2008 to December 2015, and again from March 2020 to March 2022
- Post-pandemic surge: 3.25% → 8.50% between March 2022 and July 2023 — the fastest rate increase cycle in 40 years
- Current easing cycle: 8.50% → 6.75% from September 2024 to December 2025
2020s Prime Rate Changes
| Effective Date | Prime Rate | Change |
|---|---|---|
| December 10, 2025 | 6.75% | ▼ −0.25% |
| October 29, 2025 | 7.00% | ▼ −0.25% |
| September 17, 2025 | 7.25% | ▼ −0.25% |
| December 18, 2024 | 7.50% | ▼ −0.25% |
| November 7, 2024 | 7.75% | ▼ −0.25% |
| September 18, 2024 | 8.00% | ▼ −0.50% |
| July 26, 2023 | 8.50% | ▲ +0.25% |
| May 3, 2023 | 8.25% | ▲ +0.25% |
| March 22, 2023 | 8.00% | ▲ +0.25% |
| February 1, 2023 | 7.75% | ▲ +0.25% |
| December 14, 2022 | 7.50% | ▲ +0.50% |
| November 2, 2022 | 7.00% | ▲ +0.75% |
| September 21, 2022 | 6.25% | ▲ +0.75% |
| July 27, 2022 | 5.50% | ▲ +0.75% |
| June 15, 2022 | 4.75% | ▲ +0.75% |
| May 4, 2022 | 4.00% | ▲ +0.50% |
| March 16, 2022 | 3.50% | ▲ +0.25% |
| March 15, 2020 | 3.25% | ▼ −1.00% |
| March 3, 2020 | 4.25% | ▼ −0.50% |
2010s Prime Rate Changes
| Effective Date | Prime Rate | Change |
|---|---|---|
| October 30, 2019 | 4.75% | ▼ −0.25% |
| September 18, 2019 | 5.00% | ▼ −0.25% |
| July 31, 2019 | 5.25% | ▼ −0.25% |
| December 20, 2018 | 5.50% | ▲ +0.25% |
| September 27, 2018 | 5.25% | ▲ +0.25% |
| June 14, 2018 | 5.00% | ▲ +0.25% |
| March 22, 2018 | 4.75% | ▲ +0.25% |
| December 14, 2017 | 4.50% | ▲ +0.25% |
| June 15, 2017 | 4.25% | ▲ +0.25% |
| March 16, 2017 | 4.00% | ▲ +0.25% |
| December 15, 2016 | 3.75% | ▲ +0.25% |
| December 17, 2015 | 3.50% | ▲ +0.25% |
2000s Prime Rate Changes
| Effective Date | Prime Rate | Change |
|---|---|---|
| December 16, 2008 | 3.25% | ▼ −0.75% |
| October 29, 2008 | 4.00% | ▼ −0.50% |
| October 8, 2008 | 4.50% | ▼ −0.50% |
| April 30, 2008 | 5.00% | ▼ −0.25% |
| March 18, 2008 | 5.25% | ▼ −0.75% |
| January 30, 2008 | 6.00% | ▼ −0.50% |
| January 22, 2008 | 6.50% | ▼ −0.75% |
| December 11, 2007 | 7.25% | ▼ −0.25% |
| October 31, 2007 | 7.50% | ▼ −0.25% |
| September 18, 2007 | 7.75% | ▼ −0.50% |
| June 29, 2006 | 8.25% | ▲ +0.25% |
| May 10, 2006 | 8.00% | ▲ +0.25% |
| March 28, 2006 | 7.75% | ▲ +0.25% |
| January 31, 2006 | 7.50% | ▲ +0.25% |
| December 13, 2005 | 7.25% | ▲ +0.25% |
| November 1, 2005 | 7.00% | ▲ +0.25% |
| September 20, 2005 | 6.75% | ▲ +0.25% |
| August 9, 2005 | 6.50% | ▲ +0.25% |
| June 30, 2005 | 6.25% | ▲ +0.25% |
| May 3, 2005 | 6.00% | ▲ +0.25% |
| March 22, 2005 | 5.75% | ▲ +0.25% |
| February 2, 2005 | 5.50% | ▲ +0.25% |
| December 14, 2004 | 5.25% | ▲ +0.25% |
| November 10, 2004 | 5.00% | ▲ +0.25% |
| September 21, 2004 | 4.75% | ▲ +0.25% |
| August 11, 2004 | 4.50% | ▲ +0.25% |
| July 1, 2004 | 4.25% | ▲ +0.25% |
| June 27, 2003 | 4.00% | ▼ −0.25% |
| November 7, 2002 | 4.25% | ▼ −0.50% |
| December 12, 2001 | 4.75% | ▼ −0.25% |
| November 7, 2001 | 5.00% | ▼ −0.50% |
| October 3, 2001 | 5.50% | ▼ −0.50% |
| September 18, 2001 | 6.00% | ▼ −0.50% |
| August 22, 2001 | 6.50% | ▼ −0.25% |
| June 28, 2001 | 6.75% | ▼ −0.25% |
| May 16, 2001 | 7.00% | ▼ −0.50% |
| April 19, 2001 | 7.50% | ▼ −0.50% |
| March 21, 2001 | 8.00% | ▼ −0.50% |
| February 1, 2001 | 8.50% | ▼ −0.50% |
| January 4, 2001 | 9.00% | ▼ −0.50% |
| May 17, 2000 | 9.50% | ▲ +0.50% |
| March 22, 2000 | 9.00% | ▲ +0.25% |
| February 3, 2000 | 8.75% | ▲ +0.25% |
1990s Prime Rate Changes
| Effective Date | Prime Rate | Change |
|---|---|---|
| November 17, 1999 | 8.50% | ▲ +0.25% |
| August 25, 1999 | 8.25% | ▲ +0.25% |
| July 1, 1999 | 8.00% | ▲ +0.25% |
| November 18, 1998 | 7.75% | ▼ −0.25% |
| October 16, 1998 | 8.00% | ▼ −0.25% |
| September 30, 1998 | 8.25% | ▼ −0.25% |
| March 27, 1997 | 8.50% | ▲ +0.25% |
| January 31, 1996 | 8.25% | ▼ −0.25% |
| December 20, 1995 | 8.50% | ▼ −0.25% |
| July 7, 1995 | 8.75% | ▼ −0.25% |
| February 1, 1995 | 9.00% | ▲ +0.50% |
| November 15, 1994 | 8.50% | ▲ +0.75% |
| August 16, 1994 | 7.75% | ▲ +0.50% |
| May 18, 1994 | 7.25% | ▲ +0.50% |
| April 19, 1994 | 6.75% | ▲ +0.25% |
| March 24, 1994 | 6.25% | ▲ +0.25% |
| July 2, 1992 | 6.00% | ▼ −0.50% |
| December 23, 1991 | 6.50% | ▼ −1.00% |
| November 6, 1991 | 7.50% | ▼ −0.50% |
| September 13, 1991 | 8.00% | ▼ −0.50% |
| May 1, 1991 | 8.50% | ▼ −0.50% |
| February 4, 1991 | 9.00% | ▼ −0.50% |
| January 2, 1991 | 9.50% | ▼ −0.50% |
| January 8, 1990 | 10.00% | ▼ −0.50% |
1980s Prime Rate (Selected Key Changes)
| Effective Date | Prime Rate | Note |
|---|---|---|
| February 24, 1989 | 11.50% | Decade high |
| August 26, 1986 | 7.50% | Decade low |
| February 21, 1983 | 10.50% | Post-Volcker decline |
| December 19, 1980 | 21.50% | ALL-TIME HIGH |
| April 2, 1980 | 20.00% | First time above 20% |
| July 7, 1980 | 11.00% | Brief dip mid-1980 |
1947–1979 Prime Rate (Selected Milestones)
| Effective Date | Prime Rate | Note |
|---|---|---|
| December 7, 1979 | 15.25% | End of 1970s |
| July 8, 1974 | 12.00% | Oil crisis peak |
| June 9, 1969 | 8.50% | Vietnam-era high |
| September 1, 1959 | 5.00% | Late-1950s peak |
| December 1, 1947 | 1.75% | First recorded rate |
Sources: Federal Reserve Bank of St. Louis (FRED), Wall Street Journal, FedPrimeRate.com. For the complete change-by-change dataset from 1947–present, see the FRED Bank Prime Loan Rate series.
How the Prime Rate Affects SBA 7(a) Loans
This is where the prime rate gets personal for small business buyers. The SBA 7(a) loan — the most common government-backed business loan — uses the prime rate as its base rate. Your SBA loan interest rate equals the prime rate plus a spread (also called a markup) that your lender charges on top.
The SBA doesn’t set your exact rate. Instead, it sets maximum spreads that lenders cannot exceed. Here are the current caps for variable-rate SBA 7(a) loans:
SBA 7(a) Maximum Interest Rate Caps (Variable Rate)
| Loan Amount | Maximum Spread Over Prime | Current Max Rate (March 2026) |
|---|---|---|
| $50,000 or less | Prime + 6.5% | 13.25% |
| $50,001 – $250,000 | Prime + 6.0% | 12.75% |
| $250,001 – $350,000 | Prime + 4.5% | 11.25% |
| Over $350,000 | Prime + 3.0% | 9.75% |
Source: SBA Standard Operating Procedure (SOP) 50 10
What this means in practice: If you’re buying a business for $1.2 million with an SBA 7(a) loan over $350,000, your lender can charge no more than prime + 3.0%. At today’s 6.75% prime rate, that’s a maximum of 9.75%. Most competitive lenders offer rates between prime + 2.25% and prime + 2.75% for strong borrowers — putting real rates at 9.00% to 9.50% for business acquisition loans in March 2026.
Variable vs. Fixed Rate SBA Loans
SBA 7(a) loans come in both variable and fixed rate options:
- Variable rate loans adjust with the prime rate, typically on a quarterly basis. When prime drops, your payment drops. When prime rises, so does your payment.
- Fixed rate loans lock your rate for the entire loan term. The SBA allows lenders to add an extra 1.0% to the maximum spread for fixed-rate loans with terms over 7 years. For a $350K+ loan with a 10-year term, that means the fixed-rate cap is prime + 4.0% (vs. prime + 3.0% for variable).
In the current environment — where rates are trending downward — many borrowers choose variable rates to benefit from further Fed cuts. But if you prefer payment certainty, a fixed rate at today’s levels still represents good value compared to the 8.50% prime rate of 2023. Learn more about current rates in our SBA loan interest rates guide.
Payment Impact: What Prime Rate Changes Mean for Your SBA Loan
Abstract rate percentages don’t mean much until you see the dollar impact on a real loan. Let’s run the numbers on a typical business acquisition SBA loan:
📊 Example: $1,000,000 SBA 7(a) Loan, 10-Year Term, Prime + 2.75%
| Scenario | Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|---|
| Today (Prime 6.75%) | 9.50% | $12,918 | $550,160 |
| If prime drops 0.25% (to 6.50%) | 9.25% | $12,765 | $531,800 |
| If prime drops 0.50% (to 6.25%) | 9.00% | $12,613 | $513,560 |
| 2023 Peak (Prime 8.50%) | 11.25% | $13,857 | $662,840 |
The numbers tell a clear story:
- Each 0.25% rate drop saves approximately $150/month — that’s $18,000 over the life of the loan
- A 0.50% drop saves roughly $305/month, or $36,600 over 10 years
- Compared to the 2023 peak, today’s rate saves $939/month — a total savings of $112,680 over the full loan term
These aren’t hypothetical numbers. A business buyer who waited from mid-2023 to early 2026 is paying nearly $1,000 less per month on the same loan. That’s cash flow that goes straight to operations, hiring, or the owner’s pocket.
Use our SBA loan calculators to run the numbers on your specific loan scenario.
Prime Rate vs. SOFR: Which Base Rate Is Better for SBA Loans?
The SBA allows lenders to use either the prime rate or SOFR (Secured Overnight Financing Rate) as the base rate for 7(a) loans. SOFR replaced LIBOR as the alternative benchmark in 2023. Here’s how they compare:
- Prime rate is simpler and more predictable. It moves in lockstep with Fed decisions and stays constant between meetings. Most SBA lenders default to prime-based pricing.
- SOFR is a market-driven rate based on overnight Treasury repurchase agreement transactions. It can fluctuate daily and is sometimes lower than what the prime rate implies — but SOFR-based SBA loans typically carry higher spreads to compensate.
- Bottom line: For most borrowers, the all-in rate ends up similar regardless of the base rate. Prime-based loans are more transparent and easier to understand. SOFR-based loans can occasionally offer a slight edge in specific market conditions.
At GoSBA, we work with 50+ SBA lenders and can compare both prime-based and SOFR-based offers for your loan. The best rate depends on your loan size, credit profile, and the specific lender’s pricing. Get a rate comparison to see which structure works best for your deal.
Prime Rate Forecast: What’s Next for 2026?
The Federal Reserve has been on a rate-cutting path since September 2024, delivering five cuts that brought the prime rate from 8.50% down to 6.75%. Here’s where things stand heading into the rest of 2026:
- Recent trajectory: Five consecutive cuts totaling 1.75 percentage points over 15 months
- Current stance: The Fed paused in January 2026, holding rates steady at 3.50%–3.75%
- Market expectations: Fed futures markets are pricing in 1–2 additional cuts in 2026, which would bring prime to 6.25%–6.50%
- If the Fed cuts to 3.00%–3.25%: Prime would drop to 6.25%, and typical SBA 7(a) rates for business acquisition loans would fall to 8.50%–9.00%
Risks to the forecast: Inflation remains the wild card. Tariff policy, energy costs, and labor market conditions could all push inflation higher than expected, causing the Fed to pause or even reverse course. Nothing about rate forecasts is guaranteed.
What this means for SBA borrowers: If you’re planning a business acquisition in 2026, you’re already borrowing at significantly better rates than 2023. Whether to lock a fixed rate now or ride variable rates lower depends on your risk tolerance and deal timeline. Working with an experienced SBA loan broker can help you time your rate lock for maximum savings.
Frequently Asked Questions
What is the current prime rate in March 2026?
The current U.S. prime rate is 6.75%, effective December 10, 2025. This rate was set after the Federal Reserve cut the federal funds rate target to 3.50%–3.75% at its December 2025 FOMC meeting. The prime rate has remained at 6.75% since then, including after the January 28, 2026 meeting where the Fed held rates steady.
How does the prime rate affect SBA loan interest rates?
SBA 7(a) loan interest rates are calculated as the prime rate plus a spread determined by your lender, subject to SBA maximums. For loans over $350,000 (most business acquisitions), the maximum rate is prime + 3.0%. At today’s 6.75% prime rate, that means SBA rates range from approximately 9.00% to 9.75% for larger loans. When the prime rate drops, your variable-rate SBA loan payment decreases automatically.
What was the highest prime rate in history?
The all-time high U.S. prime rate was 21.50%, reached on December 19, 1980. This was during Federal Reserve Chairman Paul Volcker’s aggressive campaign to break double-digit inflation. To put that in perspective, a $1 million SBA loan at 2023’s peak rate of 11.25% costs $13,857/month — at 1980’s 21.50%, that same loan would have cost over $20,000/month.
How often does the prime rate change?
The prime rate changes whenever the Federal Reserve adjusts the federal funds rate, which typically happens at one of the 8 scheduled FOMC meetings per year (roughly every 6 weeks). However, the Fed can also make emergency changes between meetings — as it did in March 2020. When the Fed moves rates, the prime rate adjusts within one business day. When the Fed holds rates steady, prime doesn’t change.
Should I lock a fixed or variable rate on my SBA loan?
In the current environment (March 2026), with rates on a downward trend, many borrowers benefit from variable rates that will decline further if the Fed continues cutting. However, if you prefer payment certainty and believe current rates represent good value, a fixed rate locks in today’s relatively favorable pricing. Fixed-rate SBA loans carry a slightly higher maximum spread (+1.0% for terms over 7 years), so weigh the cost of certainty against potential savings from future cuts.
Can I refinance my SBA loan if the prime rate drops significantly?
Yes. SBA borrowers can refinance into a new SBA loan if it results in at least a 10% reduction in payment amount or provides a substantial benefit. If prime drops significantly — say, to 6.00% or below — borrowers who locked fixed rates at 2023 or 2024 levels may find refinancing saves them hundreds per month. Contact us to evaluate whether refinancing makes sense for your current loan.
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Sources: Federal Reserve Board, Federal Reserve Bank of St. Louis (FRED), Wall Street Journal, SBA Standard Operating Procedure 50 10, FedPrimeRate.com. Data current as of March 2026. This article is for informational purposes only and does not constitute financial advice. Consult with a qualified financial professional before making lending decisions.
