If you're exploring how to get a loan for a restaurant or any other small business in 2025, understanding current business loan interest rates is crucial. Loan costs vary significantly depending on several factors, including the type of loan, lender, credit profile, and the financial health of your business. In 2025, average interest rates for business loans range from 7% to as high as 99%, depending on the structure and risk level of the loan.

This article breaks down the average business loan interest rates, what influences them, and what you need to know to choose the right financing option for your business.

Average Business Loan Interest Rates in 2025

Business loan interest rates vary widely depending on the loan type you choose. For example, Small Business Administration (SBA) loans generally offer the most favorable rates, typically between 7% and 11%. Traditional bank loans also remain competitive, with rates ranging from 7% to 12%.

However, if you turn to online lenders for faster funding, expect higher rates—online term loans average between 10% and 40%. More expensive financing options like merchant cash advances can carry rates from 35% up to 99%. Other alternatives, such as business lines of credit, usually have rates ranging from 8% to 25%, while invoice financing could cost anywhere between 10% and 60%.

These figures offer a starting point, but individual rates vary based on your qualifications and the specific lender’s terms.

Key Factors That Influence Business Loan Interest Rates

1. Federal Reserve Rates

The Federal Reserve's federal funds rate plays a major role in setting the benchmark for all borrowing costs. In 2025, any increases or decreases in the Fed rate directly impact how much lenders charge businesses.

2. Creditworthiness and Business Profile

Your business’s credit score, annual revenue, time in operation, and cash flow heavily influence the rate you're offered. For example, with good or excellent credit, you might secure small business loan rates as low as 7% to 8%, particularly from banks or SBA lenders.

3. Secured vs. Unsecured Loans

Loans backed by collateral (secured loans) often come with lower interest rates because they pose less risk to lenders. Unsecured loans, without collateral, generally carry higher rates to compensate for the additional risk.

4. Loan Type and Lender

Whether you borrow from a traditional bank, an online lender, or through a government-backed program like the SBA will influence the cost of borrowing. Online lenders, while quicker, usually charge higher rates compared to banks.

SBA Loans: A Low-Rate Option for Many Borrowers

If you're researching how to get a loan for a restaurant, SBA loans are one of the best options. These loans are backed by the federal government, enabling lenders to offer lower interest rates and longer repayment terms to borrowers who might otherwise be considered risky.

SBA loans typically come with interest rates ranging from 7% to 11%, depending on the program and borrower qualifications. Although the application process is more intensive, the savings in interest payments over the life of the loan can be substantial, making SBA loans highly attractive for small business owners, including those just starting out.

Comparing Business Loan Rates Effectively

Comparing business loan rates isn’t always straightforward. Some lenders offer fixed rates, while others provide variable rates that fluctuate with the market. Additionally, financing options like merchant cash advances use factor rates, making it harder to equate them directly with traditional APRs.

When evaluating offers, always ask for the Annual Percentage Rate (APR), which includes both interest and any fees, to ensure you're making an apples-to-apples comparison across different loan products.

How Your Business Type Affects Rates

Certain industries are seen as riskier than others, and this perception can impact your offered interest rate. For example, businesses in the hospitality sector — including restaurants — may face slightly higher rates due to fluctuating revenues and tight profit margins.

If you are learning how to get a loan for a restaurant, be prepared for lenders to scrutinize your business plan, cash flow projections, and financial history more closely. Nevertheless, many lenders are still eager to work with food service businesses, especially if you can demonstrate a solid plan and good credit.

Tips for Getting the Best Interest Rate

• Improve Your Credit Score: Personal and business credit scores matter. A FICO score above 680 significantly improves your chances of securing low rates.

• Strengthen Your Financials: Stable revenue, strong cash flow, and low existing debt all make you more attractive to lenders.

• Shop Around: Compare rates from multiple lenders — banks, online lenders, and SBA partners.

• Provide Collateral: Offering assets to secure your loan can often lead to better rates.

• Apply at the Right Time: Seek funding when your business financials are strongest and market rates are stable.

Final Thoughts

Understanding the average business loan interest rates in 2025 helps you make informed decisions and avoid unexpected costs. Whether you're planning expansion, managing cash flow, or investigating how to get a loan for a restaurant, being aware of lender expectations and rate trends is crucial.

As you explore your Small Business Financing Options, always consider the total borrowing cost, not just the interest rate, and choose a loan product that supports your business's long-term growth and financial health.