{"ok":true,"canonical_url":"https://dealroom.so/glossary/maximum-allowable-spread","api_url":"https://dealroom.so/api/public/glossary/maximum-allowable-spread","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":"maximum-allowable-spread","term":"Maximum allowable spread","group":"The loan itself","definition":"The highest percentage a lender can add to the base rate (like Prime or SOFR) when calculating your SBA loan's interest rate. This ensures lenders don't overcharge borrowers beyond SBA limits.","what_it_means":"The SBA sets caps on the spread lenders can charge, based on the loan amount and maturity. For example, a loan over $50,000 with a term of 7 years or more has a maximum spread. Negotiate with your lender to get a spread below the maximum, as this directly impacts your ongoing interest costs and debt service.","url":"https://dealroom.so/glossary/maximum-allowable-spread","official_sources":[{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"},{"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":"spread","term":"Spread","url":"https://dealroom.so/glossary/spread"},{"slug":"sba-optional-peg-rate","term":"SBA Optional Peg Rate","url":"https://dealroom.so/glossary/sba-optional-peg-rate"},{"slug":"wsj-prime","term":"WSJ Prime","url":"https://dealroom.so/glossary/wsj-prime"},{"slug":"interest-rate-cap","term":"Interest rate cap","url":"https://dealroom.so/glossary/interest-rate-cap"}],"related_questions":[{"question":"What are the maximum allowable interest rates for variable rate 7(a) loans, including the permissible spread?","url":"https://dealroom.so/for-lenders/questions/what-are-the-maximum-allowable-interest-rates-for-variable-rate-7-a-loans-including-the-pe"},{"question":"How do lenders determine the maximum allowable interest rate for a variable rate 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-do-lenders-determine-the-maximum-allowable-interest-rate-for-a-variable-rate-7-a-loan"},{"question":"What is the maximum allowable loan term for a 7(a) loan used solely for working capital?","url":"https://dealroom.so/for-lenders/questions/what-is-the-maximum-allowable-loan-term-for-a-7-a-loan-used-solely-for-working-capital"},{"question":"What is the maximum interest rate spread a lender can add over the base rate for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/what-is-the-maximum-interest-rate-spread-a-lender-can-add-over-the-base-rate-for-an-sba-7-"},{"question":"How does a lender determine the maximum allowable interest rate for a variable-rate 7(a) loan tied to the WSJ Prime?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-the-maximum-allowable-interest-rate-for-a-variable-rate-7-a-lo"},{"question":"What is the difference between the base rate and the spread on an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-difference-between-the-base-rate-and-the-spread-on-an-sba-7-a-loan"}]},"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 — Maximum allowable spread","url":"https://dealroom.so/glossary/maximum-allowable-spread","source_type":"DealRoom Data"}}