Fed Rate Path: What Two More Cuts Mean for SMB Financing
Fed funds futures imply two 25 bp cuts before year-end. Here's what that translates to across the SMB capital stack.
By Summit Underwriting DeskNew York · London
Tuesday, June 16, 2026New York · LondonSOFR 5.32Prime 8.50
Capital Desk · OpenVol. VII · No. 26
$100K – $500M+ · 24–72h
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The forward curve currently implies two more 25 bp cuts by December 2026. For SMB borrowers, the pass-through to financing costs is uneven by product.
Bank-issued LOCs and SBA 7(a) variable-rate loans pass through almost immediately — borrowers should see 50 bps off their next reset. CRE bridge debt and non-bank term loans move with private credit spreads, which lag policy by 1–2 quarters and have already partially priced the expected cuts.
What doesn't move much
MCA and revenue-based pricing barely correlate with policy rates — they're driven by underwriting risk premia and capital availability. RBF pricing has compressed independently of Fed policy as syndicate appetite grew.
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