SBA loan basics
Short answer
The interest rate for an SBA 7(a) loan is determined by a base rate, usually the Prime Rate, plus a fixed or variable spread (markup) set by the lender within SBA-mandated maximums.
SBA rules allow lenders to charge interest rates that are a combination of a base rate (often the Wall Street Journal Prime Rate) and an additional fixed or variable spread. The SBA sets maximum allowable spreads, which vary based on the loan amount and repayment term, to prevent excessive charges to borrowers.
If the Prime Rate is 8.50%, a lender might offer an SBA 7(a) loan at Prime + 2.75%, resulting in an initial rate of 11.25%. For a smaller loan with a shorter term, the maximum allowable spread might be higher, such as Prime + 4.75%.
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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