{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-are-the-currently-approved-base-rate-options-for-variable-rate-7-a-loans","api_url":"https://dealroom.so/api/public/questions/what-are-the-currently-approved-base-rate-options-for-variable-rate-7-a-loans","question":"What are the currently approved base rate options for variable rate 7(a) loans?","topic":"Base Rates","audience":"lender","bot_mode":"lender","short_answer":"The SBA currently approves the Wall Street Journal Prime Rate, the 1-month London Interbank Offered Rate (LIBOR) prior to its cessation and now its replacement Secured Overnight Financing Rate (SOFR), and the SBA Peg Rate as base rate options.","rule":"For variable rate 7(a) loans, the interest rate is tied to a permissible base rate plus a spread. Lenders can choose from several SBA-approved base rates. While LIBOR was a historical option, it has been replaced by SOFR. The SBA Peg Rate is an alternative base rate published quarterly by the SBA, providing another option for lenders. The chosen base rate must be clearly disclosed in the loan authorization.","example":"A lender offers a variable rate 7(a) loan with an interest rate of Prime + 2.75%. The Wall Street Journal Prime Rate is the chosen base rate, and the interest rate adjusts whenever the Prime Rate changes.","what_lenders_check":"Lenders must ensure they use an SBA-approved base rate and correctly calculate the maximum allowable interest rate, including the permitted spread. Any deviation can result in a guaranty repair or denial for excessive interest.","required_facts":["Base rate","Variable rate","Prime Rate","SOFR","SBA Peg Rate"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","7(a) Alternative Base Rate Options","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"7(a) Alternative Base Rate Options","url":"https://www.sba.gov/sites/default/files/2026-02/Procedural%20Notice%205000-875051-%207%28a%29%20Alternative%20Base%20Rates.pdf"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"How does a lender determine which alternative base rate to use for a variable rate 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-which-alternative-base-rate-to-use-for-a-variable-rate-7-a-loa"},{"question":"What are the acceptable alternative base rate options for variable-rate 7(a) loans, besides the Wall Street Journal Prime rate?","url":"https://dealroom.so/for-lenders/questions/what-are-the-acceptable-alternative-base-rate-options-for-variable-rate-7-a-loans-besides-"},{"question":"How should a lender handle the transition of an existing variable-rate 7(a) loan from LIBOR to an alternative base rate?","url":"https://dealroom.so/for-lenders/questions/how-should-a-lender-handle-the-transition-of-an-existing-variable-rate-7-a-loan-from-libor"},{"question":"If a lender wishes to use SOFR as a base rate for a variable rate 7(a) loan, what specific documentation is required?","url":"https://dealroom.so/for-lenders/questions/if-a-lender-wishes-to-use-sofr-as-a-base-rate-for-a-variable-rate-7-a-loan-what-specific-d"},{"question":"What are the specific notification requirements for a lender when adjusting the interest rate on a variable rate 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-notification-requirements-for-a-lender-when-adjusting-the-interest-r"},{"question":"What alternative base rate options are available for variable rate 7(a) loans?","url":"https://dealroom.so/for-lenders/questions/what-alternative-base-rate-options-are-available-for-variable-rate-7-a-loans"}],"related_terms":[{"term":"Variable-rate 7(a) loan","url":"https://dealroom.so/glossary/variable-rate-7-a-loan"},{"term":"Alternative Base Rates","url":"https://dealroom.so/glossary/alternative-base-rates"},{"term":"Base rate","url":"https://dealroom.so/glossary/base-rate"},{"term":"Variable rate","url":"https://dealroom.so/glossary/variable-rate"},{"term":"Options","url":"https://dealroom.so/glossary/options"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/what-are-the-currently-approved-base-rate-options-for-variable-rate-7-a-loans","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}