Business Funding Rates & Cost Guide
Understand exactly what business funding costs before you apply. Compare pricing, fee structures, and total costs across every major funding product.
How Much Does Business Funding Cost?
Business funding costs vary by product type, term length, borrower qualifications, and lender.
U.S. Bank Prime Loan rate
Pro Capital term loans and lines of credit start at Prime + 1.
Unsecured, with no loan minimum or maximum. Term loans and lines of credit require 680+ FICO. Soft credit pull only.
Source: Board of Governors of the Federal Reserve System (H.15) via FRED
| Funding Type | Pricing | Term Length | Best For |
|---|---|---|---|
| SBA 7(a) Loan | Varies by lender and profile | 5–25 years | Long-term growth & real estate |
| Term Loan | Starts at Prime + 1 | 1–5 years | One-time investments & expansion |
| Line of Credit | Starts at Prime + 1 | Revolving | Working capital & cash flow |
| Invoice Factoring | Varies by lender and profile | 30–90 days | Cash flow gaps & AR acceleration |
| PO Financing | Varies by lender and profile | Per order | Large orders & contracts |
Final pricing depends on creditworthiness, time in business, revenue, product, and lender terms. Source: SBA.gov Loan Programs; Federal Reserve Small Business Credit Survey, 2024.
Understanding the True Cost of Business Funding
Interest rate is only one component. These factors also affect your total cost:
Interest Rate vs. Factor Rate
Traditional loans quote an annual interest rate. Short-term funding and MCAs may use a factor rate, which multiplies the advance amount. Review the total repayment and payment schedule before choosing an option.
Origination Fees
Many lenders charge 1%–5% of the funded amount as an origination or processing fee. SBA loans may include guarantee fees ranging from 2%–3.75%. These fees are often rolled into the loan, increasing total cost.
Prepayment Penalties
Some lenders charge early payoff penalties. SBA 7(a) loans have a prepayment penalty if paid within the first 3 years. Many alternative lenders do not discount for early payoff. Always ask about prepayment terms before signing.
Collateral Requirements
Secured loans backed by assets may offer lower rates. Unsecured products can carry higher rates to offset lender risk. Final pricing depends on the lender, the product, and your business profile.
Business Lending by the Numbers
According to the 2024 Federal Reserve Small Business Credit Survey, 43% of employer firms applied for new financing in the prior 12 months. Among applicants, 68% sought loans or lines of credit, with a median amount of $100,000. Approval rates varied by lender type: large banks approved 49% of applicants, small banks 73%, and online lenders 55%.
The SBA 7(a) loan program is a government-backed option for eligible businesses. Final pricing depends on the lender, the product, and your business profile. Learn more from SBA.gov.
Pro Capital enables businesses to compare offers across product types and find the most competitive rate for their specific profile — with no credit impact to apply.
Frequently Asked Questions
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