SBA 7(a) Q&A
Short answer
The SBA sets maximum interest rate spreads (the 'cap') that a lender can add over the base rate (e.g., Prime Rate). For loans over $50,000, this is typically Prime + 2.75% for terms over 7 years.
SBA establishes maximum allowable interest rates for 7(a) loans based on the base rate (e.g., Prime Rate, SOFR) plus a fixed spread. The spread varies by loan size and maturity. For variable rate loans over $50,000 with maturities greater than 7 years, the maximum allowable spread is 2.75% over the base rate.
If the Prime Rate is 8.50%, a lender can charge you a maximum of 8.50% + 2.75% = 11.25% on an SBA 7(a) loan over $50,000 with a 10-year term.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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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