For SBA lenders
Short answer
Lenders determine the maximum allowable interest rate by adding the maximum permitted spread, as set by the SBA, to the chosen base rate (e.g., Prime, Term SOFR).
SOP 50 10 sets maximum allowable interest rates for 7(a) loans, consisting of a publicly available base rate plus a maximum spread. The spread varies based on the loan amount and maturity. Lenders must not exceed these maximums to ensure the loan remains eligible for the SBA guaranty.
For a $600,000 variable rate 7(a) loan with a 10-year term, the lender chooses the Prime Rate as the base. If the SBA's maximum spread is 2.75%, the highest allowable interest rate would be Prime Rate + 2.75%.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
7(a) Alternative Base Rate Options
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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