For SBA lenders
Short answer
A lender can adjust the interest rate on a variable rate 7(a) loan tied to the Prime Rate no more frequently than monthly, as specified in the loan authorization.
SBA regulations permit variable interest rates for 7(a) loans to be tied to a base rate (such as Prime Rate) plus a fixed spread. The frequency of adjustment must be clearly stated in the loan authorization and cannot exceed monthly. Lenders must adhere to the authorized adjustment period.
A $500,000 7(a) loan is authorized with an interest rate of Prime + 2.75%, adjusted monthly. If the Prime Rate changes on the first business day of the month, the lender can adjust the borrower's interest rate effective for that month, but not again until the following month, even if Prime changes mid-month.
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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