Rate ranges across SMB financing don't move uniformly. Bank pricing follows Prime; alternative pricing follows risk appetite, capital availability, and the macro signal du jour. Q2 2026 is the first quarter in two years where bank and non-bank pricing have moved in opposite directions: banks tightened post the Q1 regulatory pass, and the alternative market eased as new capital entered the space. Here's the working snapshot we're seeing across our funding partner network.
Working capital / MCA
Factor rates: 1.18 – 1.55. Effective APR: roughly 25 – 110% depending on term, with most 6–12 month deals landing in the 40 – 65% APR-equivalent range.
The bands by file strength:
- Stronger files (650+ FICO, 18+ months in business, $30k+/month deposits, no recent NSFs): 1.18 – 1.28 factor, 9 – 15 month terms.
- Mid-tier files (580–650 FICO, 12+ months, $15k+/month, occasional NSFs): 1.28 – 1.40 factor, 6 – 12 month terms.
- Higher-risk files (500–580 FICO, 6+ months, $10k+/month, deposit volatility): 1.40 – 1.55 factor, 4 – 9 month terms.
The single biggest pricing lever isn't credit — it's deposit consistency. Files that show 12+ deposit days per month and tight ending-balance trends often price one full tier better than their FICO would suggest. See How factor rates work for the math behind the conversion. Access, not just price, is the other half of the story: the Fed's 2026 Report on Employer Firms found 42% of applicants received the full financing amount they sought, 36% received some or most of it, and 22% received none — a reminder that shopping multiple lender types (bank, non-bank, and everything between) affects outcome as much as it affects rate.
Business line of credit
- Bank lines (680+ FICO, 2+ years, profitable financials): 8.5 – 14% APR on drawn balances.
- Non-bank / fintech lines (600+ FICO, 12+ months, $15k+/month): 18 – 35% APR.
The non-bank line market eased meaningfully in Q1 — a couple of new entrants brought floor rates down 200–300 bps for the cleanest mid-tier files. Worth re-shopping your line if you're approaching a renewal.
Term loans
- Bank term loans (full financials, 2+ years, profitable): 8.5 – 14% APR over 3–10 years.
- Alternative term loans (24+ months, 650+ FICO, $25k+/month): 18 – 60% APR over 6–60 months. Most clean files price 22 – 35%.
The alternative term-loan market is where the rate gap has compressed the most. A year ago, a 700 FICO / 36-month-old business was paying 30%+ for a non-bank term loan; today the same file is closing closer to 22%. If you took alternative debt in 2023 or 2024, refinancing math is worth running again — see Term loans vs MCAs for the consolidation framework.
Equipment financing
7 – 25% APR, depending on credit, equipment type, and resale market.
- Top-tier credit + standard equipment (700+ FICO, 5+ years, Class 8 trucks / common construction / mainstream restaurant): 7 – 11% APR.
- Mid-tier (600–700 FICO, 12–24 months, used or specialized equipment): 11 – 18% APR.
- Higher-risk / deeper-tier files: 18 – 25% APR with 10–20% down typical.
Equipment is the most credit-friendly product on the menu — the equipment itself secures the loan, so 580 FICO can often get equipment financing where it can't get a term loan or line of credit. See Equipment financing vs MCA for when to route there instead of working capital.
SBA 7(a)
Variable, capped at Prime + 3.0% to + 6.5% on 7(a) loans depending on loan size and term. With Prime at 6.75% (Federal Reserve H.15), that puts current SBA 7(a) pricing roughly in the 9.75 – 13.25% APR range across the cap stack, with longer terms (10 years for working capital, up to 25 for real estate) carrying the longest amortization available to small businesses.
Always check current SBA rate caps and Prime at sba.gov before assuming any specific number. SBA timelines have tightened in 2026 — see The SBA bottleneck for the longer take.
What moved this quarter
Three trends visible across our funded-deal flow in Q1 2026:
- Bank line floors moved up ~50 bps as tier-one underwriting tightened on revenue-quality requirements (more on this in our next regulatory update).
- Non-bank line floors moved down ~200–300 bps as new capital entered the space.
- Alternative term loan pricing compressed for clean mid-tier files as competition between non-bank lenders increased.
The practical takeaway: if you're approaching a refinance or renewal, this is the most favorable rate environment for non-bank product shopping in two years. If you're a bankable borrower, the SBA path got slower but cheaper relative to alternatives.
How to use these numbers
These ranges are illustrative across our lender partner network — your actual offer depends on your specific file. The fastest way to see which products typically fit your profile, without a hard credit pull, is the funding calculator. If you want a real conversation about which product fits and a real offer, start an application — we'll route to the right partner.
We'll publish another rate snapshot at the start of Q3.
Sources
- SBA.gov 7(a) loan program — program ceilings, FICO SBSS gating signal, PLP-lender closing timelines (sba.gov/funding-programs/loans/7a-loans).
- Federal Reserve H.15 — Prime rate release; drives variable-rate SMB pricing (federalreserve.gov/releases/h15).
- Federal Reserve 2026 Report on Employer Firms (2025 SBCS) — SMB approval rates, denial-correlate signals, and product-mix data (fedsmallbusiness.org/reports/survey/2026/2026-report-on-employer-firms).
- CFPB Regulation Z (TILA) — APR-disclosure rules; SMB financing is largely exempt, which is why state CFDLs exist (consumerfinance.gov/rules-policy/regulations/1026).
Keep reading
If you're going deeper on this topic, these are the next stops:
