{"ok":true,"canonical_url":"https://dealroom.so/glossary/spread","api_url":"https://dealroom.so/api/public/glossary/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":"spread","term":"Spread","group":"The loan itself","definition":"What the lender adds on top of Prime. The SBA caps it — 3% for loans over $350K. Strong borrowers negotiate under the cap.","what_it_means":"The spread is the lender's margin — it covers their cost of capital, risk, and profit. For loans over $350K the SBA caps the spread at 3% over Prime; for smaller loans the cap is slightly higher. Strong deals with excellent DSCR, clean books, and an experienced buyer can sometimes negotiate under the cap, especially with a PLP lender who wants the volume. Even a half-point difference on a $1M loan is meaningful over a ten-year term.","url":"https://dealroom.so/glossary/spread","official_sources":[{"slug":"terms-conditions-eligibility","title":"7(a) Loan Program — Terms, Conditions, and Eligibility","official_url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility","official_label":"View on SBA.gov","authority_tier":5,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/terms-conditions-eligibility"},{"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"}],"related":[{"slug":"wsj-prime","term":"WSJ Prime","url":"https://dealroom.so/glossary/wsj-prime"},{"slug":"variable-rate","term":"Variable rate","url":"https://dealroom.so/glossary/variable-rate"},{"slug":"plp-lender","term":"PLP lender","url":"https://dealroom.so/glossary/plp-lender"},{"slug":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"}],"related_questions":[{"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 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 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-"}]},"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 — Spread","url":"https://dealroom.so/glossary/spread","source_type":"DealRoom Data"}}