{"ok":true,"canonical_url":"https://dealroom.so/glossary/permissible-spread","api_url":"https://dealroom.so/api/public/glossary/permissible-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":"permissible-spread","term":"Permissible Spread","group":"The loan itself","definition":"This is the maximum interest rate a lender can charge on an SBA 7(a) loan, set by the SBA as a margin above a base rate. Buyers care because it directly impacts your monthly loan payments and total cost of borrowing.","what_it_means":"The SBA defines maximum spreads (e.g., 2.25% to 3.75% over Prime/SOFR, depending on loan size and term). Lenders will price your loan within this range. Negotiate for the lowest spread possible, as even small differences add up over a long amortization period.","url":"https://dealroom.so/glossary/permissible-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":"variable-rate","term":"Variable rate","url":"https://dealroom.so/glossary/variable-rate"},{"slug":"wsj-prime","term":"WSJ Prime","url":"https://dealroom.so/glossary/wsj-prime"},{"slug":"sofr","term":"SOFR","url":"https://dealroom.so/glossary/sofr"},{"slug":"spread","term":"Spread","url":"https://dealroom.so/glossary/spread"}],"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":"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 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"},{"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":"What are the permissible alternative base rate options for variable-rate 7(a) loans besides the Wall Street Journal Prime?","url":"https://dealroom.so/for-lenders/questions/what-are-the-permissible-alternative-base-rate-options-for-variable-rate-7-a-loans-besides"},{"question":"What specific documentation is required to formally transition an authorized 7(a) loan from one permissible base rate to another?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-to-formally-transition-an-authorized-7-a-loan-from"}]},"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 — Permissible Spread","url":"https://dealroom.so/glossary/permissible-spread","source_type":"DealRoom Data"}}