Your bridge loan’s rate, fees and total payback will be in the written offer from the lender that makes it, so that offer is the document to compare. This page gives you the public benchmarks that sit behind those offers: the Federal Reserve’s bank prime rate, the SBA fees that apply to loans approved from October 1, 2026, what business borrowers report paying, and the cautions federal regulators and state officials have issued about merchant cash advances, a common alternative.
What is the current rate on a bridge loan?
Each lender sets its own rate, so the number in your offer is the one that counts. The Federal Reserve’s H.15 release publishes the bank prime loan rate. Its footnote says prime is one of several base rates banks use to price short-term business loans.
For what small firms report paying on short-maturity loans, see the NFIB September 2026 survey.
What do lenders ask for before they approve a bridge loan?
The down payment or equity a lender expects is set in its offer, and the evidence here does not give a standard figure. For SBA 7(a) loans, the SBA 7(a) loan page lists these requirements: the business must be an operating business, operate for profit, be located in the U.S., be small under SBA size requirements, not be an ineligible business type, be unable to get the credit on reasonable terms from non-government sources, and be creditworthy with a reasonable ability to repay. You apply through a lender, not directly with SBA. SBA’s Lender Match tool can match you with a participating lender.
SBA stopped using the FICO SBSS score for 7(a) small loans effective March 1, 2026. Lenders now use general industry credit analysis, and the lender’s credit memo must state why credit is not available elsewhere, according to an SBA procedural notice.
Owners often put their own assets behind business debt. The Federal Reserve’s 2026 Small Business Credit Survey reports that of firms with debt, 59% used a personal guarantee to secure it, and 51% used business assets. That survey drew 6,525 responses and is a convenience sample, not a random one.
What does an SBA loan cost?
For SBA 7(a) loans with a maturity over 12 months, the upfront fee depends on loan size and is charged on the guaranteed portion. The SBA’s FY 2027 fee notice sets these fees for loans approved October 1, 2026 through September 30, 2027. The FY 2026 notice listed the same figures for the prior year.
| Loan size (SBA 7(a)) | Upfront fee on guaranteed portion |
|---|---|
| $150,000 or less | 2% |
| $150,001 to $700,000 | 3% |
| $700,001 to $5,000,000 | 3.5% up to $1,000,000, plus 3.75% above $1,000,000 |
The annual service fee is 0.55% of the outstanding guaranteed balance. SBA says lenders may not pass that fee on to the borrower.
For fees and loan limits in more detail, see our SBA 7(a) loan guide.
The maximum interest rate on a 7(a) loan with a prime base is set by loan size, according to the SBA’s procedural notice on 7(a) rates. Your lender’s note will state the rate it uses.
| Loan amount (SBA 7(a)) | Maximum rate, prime base |
|---|---|
| $50,000 or less | Prime + 6.5% |
| $50,001 to $250,000 | Prime + 6.0% |
| $250,001 to $350,000 | Prime + 4.5% |
| $350,001 and higher | Prime + 3.0% |
Which SBA loan covers what?
| Program | Maximum amount | What it can be used for | How you get it |
|---|---|---|---|
| 7(a) loan | $5 million | Working capital, refinancing business debt, real estate, machinery and equipment, changes of ownership | Through a participating SBA lender |
| 504 loan | $5.5 million in the body of the page; the summary line says $5 million | Long-term, fixed-rate financing for major fixed assets; cannot be used for working capital or inventory | Through Certified Development Companies |
| Microloan | Up to $50,000; the average is about $13,000 | Working capital, inventory, supplies, furniture, fixtures, machinery, equipment; cannot pay existing debts or buy real estate | Through SBA-approved intermediary lenders; generally 8%-13% interest, maximum term seven years |
The SBA 7(a) loan page does not list bridge loans among its uses. Ask your lender which program, if any, would fund yours. If your bridge loan is for buying commercial property, our comparison of commercial real estate bridge loans lists lenders by speed, cost and loan-to-value terms. If you are weighing a term loan against a credit line, our guide to working capital loans vs lines of credit walks through that choice.
What are the downsides of a bridge loan or other short-term business loan?
The Fed’s 2026 Small Business Credit Survey reports that 60% of borrowers from online lenders said actual borrowing costs were higher than expected, and 4% said lower. Borrowers at small banks and large banks were less likely to report higher-than-expected costs, at 37% and 32%. Credit union and bank applicants were also more satisfied with their experiences than online lender and finance company applicants.
Access is not guaranteed either. Of the firms that applied for financing, 42% received the full amount they sought, 36% received some or most, and 22% received none.
How does a merchant cash advance work, and why do regulators watch it?
A merchant cash advance is commonly structured as sales-based financing. The FTC describes it as a company that provides funds to a business in exchange for a percentage of the business’s revenue. In the FTC’s January 2022 release, it adds that a merchant cash advance company typically makes daily withdrawals from the business’s bank account until the obligation has been met.
A 2025 Texas bill analysis for H.B. 700 records the sponsor’s statement of intent. It says these products provide an upfront cash payment in exchange for a percentage of future sales revenue, are structured as sales-based financing, and are currently not disclosed as loans. The analysis is an engrossed bill, dated May 22, 2025.
The FTC has brought cases in this market. Its January 2022 release says two defendants were banned from the industry and ordered to pay $675,000 after the FTC alleged they required personal guarantees and upfront fees after saying they would not. In its February 2024 release, a federal court entered a $20.3 million judgment against a merchant cash advance operator after a jury found he deceived small businesses about the amount of funding.
New York’s Attorney General settled a lawsuit against Yellowstone Capital and its companies. The New York AG’s settlement page, last updated April 16, 2026, says the suit alleged the firm provided loans rather than merchant cash advances, at rates higher than state law allows. The settlement canceled $534 million in merchant debts. The AG says the case against Delta Bridge (Cloudfund) continues.
Before you sign any merchant cash advance contract, ask for the factor rate and the total payback in dollars, in writing.
How do you check a lender before you sign?
Start with SBA’s Lender Match tool for 7(a) lenders, or contact your local SBA district office. SBA’s Resource Partners also offer help.
The New York AG’s page gives a practical test for any merchant cash advance. Check the top of the contract and its first paragraph, because the name there can be a doing-business-as name, not the legal name. Then check your bank statement to see which company is debiting your account.
Before you borrow: what to ask the lender
- What is the rate, the base rate it is tied to, and the spread added to it?
- What are the fees in dollars, including any upfront fee and the annual service fee?
- What is the total payback in dollars, and what is the payment schedule?
- Is there a personal guarantee, or a lien on business assets?
- If the product is a merchant cash advance, what is the factor rate?
Personal mortgage questions
This page covers business financing only. For a personal mortgage, including a monthly payment on a $400,000 loan or a 30-year term, ask a mortgage lender for a written payment schedule.
This page is general information only. It is not personal financial or legal advice, and it does not promise approval, a rate, an amount or a speed. Rates are as of the dates shown.
By USPatriotNews.com Editorial Team
