Interest rates for SBA loans increase 25 basis points today
Yesterday the Fed raised interest rates for the sixth time since December 2015 pushing the WSP rate to its highest level since April 2008. The new rate goes into effect today.
“The economic outlook has strengthened in recent months,” the Fed said in a statement following its two-day Federal Open Market Committee meeting.
The federal funds rate went from 1.5% to 1.75% causing the Wall Street Prime Rate (from which most SBA loans are based) to inch up again from 4.5% to 4.75%.
Most SBA loans are being offered from 2% to 2.75% plus WSP rate, bringing current SBA borrowers and new alike, to an SBA rate from 6.75% to 7.5%.
The next Fed meeting will be on May 21st. The Fed indicated that rates could be raised twice more in 2018. This was the first Federal Reserve Committee meeting for Chairman Jerome Powell who replaced Janet Yellen as chair.
For more information on how raising rates impact advisor loans check out this AdvisorLoans Insight Article we wrote the last time Fed raised rates.