Interest rates & terms: what to actually expect
Rates aren't a single sticker price. They're built from a base rate plus a margin that reflects how risky your file looks. Here's how to read them.
Most small-business loans are priced as a base rate (often prime) plus a spread. The spread is where your file's risk shows up: stronger coverage, security, and experience generally earn a tighter margin.
What drives your rate
- Perceived risk of the business and the owner
- The security backing the loan
- Loan size, term, and the lender's own pricing
Terms matter as much as rate
Amortization length changes your payment, and therefore your DSCR, often more than a small rate difference does. A longer term lowers the payment and improves coverage, at the cost of more total interest.
The move
Model your plan at a realistic rate assumption and show it. A file that clearly services its debt at a conservative rate is what earns you a better one.
See where your financing file stands
Fifteen questions, four minutes, no documents and no email. You get a readiness stage, the gaps a lender would raise, and the document list for your request.
Check my readiness, freeLenderReady is an educational service, not a lender, broker, or financial advisor. Lending criteria vary by institution and change over time; treat this as a starting point, not a guarantee.