{"ok":true,"canonical_url":"https://dealroom.so/glossary/default-rate","api_url":"https://dealroom.so/api/public/glossary/default-rate","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"default-rate","term":"Default rate","group":"The loan itself","definition":"This is a higher interest rate that a lender can impose on a loan once it enters default, as specified in the loan agreement. It's a penalty for failing to meet repayment obligations.","what_it_means":"Your SBA loan agreement will specify a \"default rate\" that kicks in if your loan goes into \"loan default.\" This rate is significantly higher than your standard \"all-in rate\" and compensates the lender for increased risk and collection costs. Avoiding default is key to not incurring this extra expense.","url":"https://dealroom.so/glossary/default-rate","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"all-in-rate","term":"All-in rate","url":"https://dealroom.so/glossary/all-in-rate"},{"slug":"loan-performance","term":"Loan performance","url":"https://dealroom.so/glossary/loan-performance"},{"slug":"restructuring-of-payments","term":"Restructuring of payments","url":"https://dealroom.so/glossary/restructuring-of-payments"}],"related_questions":[{"question":"What alternative base rates are available for variable-rate 7(a) loans besides the Wall Street Journal Prime rate?","url":"https://dealroom.so/for-lenders/questions/what-alternative-base-rates-are-available-for-variable-rate-7-a-loans-besides-the-wall-str"},{"question":"What is the 'Prime Rate' when talking about SBA 7(a) loan rates?","url":"https://dealroom.so/sba-loans/basics/what-is-the-prime-rate-when-talking-about-sba-7-a-loan-rates"},{"question":"What specific alternative base rates are permissible for variable rate 7(a) loans?","url":"https://dealroom.so/for-lenders/questions/what-specific-alternative-base-rates-are-permissible-for-variable-rate-7-a-loans"},{"question":"What happens if I default on an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-happens-if-i-default-on-an-sba-7-a-loan"},{"question":"How does a lender request an SBA guaranty purchase after loan default?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-request-an-sba-guaranty-purchase-after-loan-default"},{"question":"What is the Wall Street Journal Prime Rate's role in SBA 7(a) loan interest rates?","url":"https://dealroom.so/sba-loans/basics/what-is-the-wall-street-journal-prime-rate-s-role-in-sba-7-a-loan-interest-rates"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Default rate","url":"https://dealroom.so/glossary/default-rate","source_type":"DealRoom Data"}}