The prime rate is the benchmark interest rate U.S. commercial banks charge their most creditworthy corporate customers — set at roughly the federal funds rate plus 3 percentage points. As of Q2 2026, the prime rate is 7.50%. Most SMB loan APRs are priced as prime plus a spread of 2–8%.
The prime rate is published daily by the Federal Reserve in its H.15 Selected Interest Rates statistical release (https://www.federalreserve.gov/releases/h15/). When the Federal Open Market Committee (FOMC) raises or lowers the federal funds rate target, banks adjust the prime rate in lockstep — prime is mechanically set at FFR + ~3 percentage points. The Wall Street Journal surveys the 10 largest U.S. banks and publishes the consensus; if 7 of 10 change their rate, the WSJ Prime Rate updates. For small business borrowers, the prime rate is the reference rate behind most floating-rate products. SBA 7(a) loans are priced at prime + 2.25%–4.75% depending on loan size and term. Business lines of credit at banks are typically prime + 1%–3% for strong files. Equipment financing often uses a fixed equivalent derived from the prime spread at origination. The prime rate in Q2 2026 is 7.50%, reflecting the FOMC's current federal funds rate target of 4.25%–4.50%. A 7.50% prime rate means a prime + 3% SBA loan carries a 10.50% APR — meaningfully higher than the pre-pandemic prime of 3.25% (2020–2022), when the same loan would have been 6.25%.
The prime rate is set by individual banks but tracks the Federal Reserve's federal funds rate (FFR) mechanically — prime is approximately FFR + 3%. When the FOMC raises or cuts the FFR, every major bank adjusts prime within 24 hours. The Federal Reserve publishes the current rate in its H.15 release at federalreserve.gov/releases/h15/.
7.50% as of Q2 2026, corresponding to a federal funds rate target of 4.25%–4.50% set by the FOMC. The prime rate changes when the Fed changes the FFR — check the Federal Reserve H.15 release for the current figure.
Yes. If your business loan, SBA loan, or line of credit is priced at prime + a margin, your rate moves with every Fed rate change. A 0.25% Fed cut reduces your payment on a $500K loan by roughly $1,250/year in interest. Floating-rate loans benefit from Fed cuts but cost more after Fed hikes.