For SBA lenders
Short answer
The maximum interest rate is the chosen base rate (e.g., WSJ Prime, Term SOFR) plus a maximum allowable spread, which varies based on the loan amount and term.
SBA sets maximum allowable interest rates for 7(a) loans, which are calculated as a specified base rate plus a maximum legal spread. This spread is capped by SBA and varies depending on the loan amount (e.g., over $50,000 vs. $50,000 or less) and loan term. Lenders cannot exceed these maximums, but can charge less.
A lender is structuring a variable rate 7(a) loan for $200,000 with a 10-year term. If the current WSJ Prime rate is 8.50%, the lender could charge Prime plus up to 2.25%, resulting in a maximum rate of 10.75% for this loan amount and term.
Insider move
Lenders must adhere strictly to SBA's maximum interest rate caps. Charging an interest rate above the allowable maximum is a non-curable eligibility issue that will lead to a guaranty denial. Proper documentation of the rate calculation in the loan file is essential.
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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