For SBA lenders
Short answer
The maximum allowable interest rate for a variable-rate 7(a) loan tied to the WSJ Prime is the Prime Rate plus an allowable spread, which varies based on the loan amount and term.
SBA sets maximum allowable interest rates for 7(a) loans, comprised of a base rate (e.g., WSJ Prime) plus a permissible spread. The spread is generally capped at 2.25% for loans over $50,000 (with higher caps for smaller loans or shorter terms). Lenders cannot charge more than these maximums, and rate changes must align with changes in the base rate.
For a $600,000 variable-rate 7(a) loan with a 10-year term, if the WSJ Prime Rate is 8.50%, the maximum interest rate the lender can charge is 8.50% (Prime) + 2.25% (max spread) = 10.75%.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
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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