For SBA lenders
Short answer
In addition to the Wall Street Journal Prime rate, lenders can choose from the London Interbank Offered Rate (LIBOR) prior to its discontinuation, or the Secured Overnight Financing Rate (SOFR) as alternative base rates for 7(a) loans.
Historically, the Wall Street Journal Prime rate was the most common base rate for variable-rate 7(a) loans. However, the SBA has expanded options to include other widely accepted indices, such as SOFR, especially with the phasing out of LIBOR. Lenders must select a base rate that is publicly available, verifiable, and consistent with prudent lending practices.
A lender structuring a new variable-rate 7(a) loan might offer the borrower a choice between Wall Street Journal Prime + 2.75% or SOFR + 3.00%, ensuring the chosen base rate is clearly defined in the loan documents and tied to a publicly available index.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Alternative Base Rate Options
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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