For SBA lenders
Short answer
Lenders can adjust the interest rate on variable rate 7(a) loans monthly, quarterly, semi-annually, or annually, as specified in the loan authorization and promissory note.
The SBA permits lenders to choose the frequency of interest rate adjustments for variable rate loans, which must be clearly disclosed in the loan documents. This allows for flexibility but also requires the lender to adhere to the agreed-upon schedule for rate changes based on the chosen base rate (e.g., Prime, SOFR).
A borrower's 7(a) loan is structured with a variable rate tied to the Prime Rate, adjusted quarterly. The lender must adjust the interest rate on the first day of each calendar quarter based on the Prime Rate published on that day (or the last business day prior).
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
7(a) Alternative Base Rate Options
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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