For SBA lenders
Short answer
Beyond the Prime Rate, current alternative base rate options for variable rate 7(a) loans include the Term SOFR (Secured Overnight Financing Rate) and the Wall Street Journal published 'WSJ Prime' rate.
The SBA provides flexibility for lenders to use different indices for variable rate 7(a) loans. Lenders can choose between the Prime Rate, Term SOFR, or WSJ Prime as published. The chosen base rate must be publicly available and identifiable. The maximum allowable interest rate spread (margin) is then added to this base rate.
A lender offers a borrower a variable rate 7(a) loan. Instead of Prime, the lender structures the loan using the 30-day Term SOFR plus a 2.75% margin, with rate adjustments occurring quarterly as defined in the loan agreement.
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.
More on base rates
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day