For SBA lenders
Short answer
Besides the Wall Street Journal Prime rate, acceptable alternative base rates for variable-rate 7(a) loans include the Secured Overnight Financing Rate (SOFR) and the 30-day London Interbank Offered Rate (LIBOR) for existing loans, though LIBOR is being phased out.
The SBA allows lenders to use alternative base rates for variable-rate 7(a) loans, primarily to accommodate market standards and lender preferences. While WSJ Prime is common, SOFR has emerged as the preferred alternative, replacing LIBOR as it sunsets. Lenders must clearly state the chosen base rate in the loan authorization.
A lender offers a variable-rate 7(a) loan. Instead of pricing it at "WSJ Prime + 2.75%," they can now price it at "SOFR (30-day average) + 3.00%," clearly defining the index and margin in the loan documents and authorization.
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
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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