SBA loan basics
Short answer
SBA 7(a) loan interest rates are tied to a base rate, usually the Wall Street Journal Prime Rate, plus a fixed spread determined by the lender and loan amount. Rates can be fixed or variable.
SBA 7(a) loan interest rates are typically variable, indexed to a base rate such as the Wall Street Journal Prime Rate, SOFR (Secured Overnight Financing Rate) as an alternative to LIBOR, or the SBA Peg Rate. Lenders add a "spread" or "markup" to this base rate, which is capped by the SBA based on the loan amount and term. Fixed rates are also possible, typically set at the current variable rate plus the maximum allowable spread.
For a $300,000 loan, if the Prime Rate is 8.50% and the lender's allowed spread is 2.75%, the interest rate would be 11.25% (8.50% + 2.75%). This rate would adjust if the Prime Rate changes.
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
7(a) Alternative Base Rate Options
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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