SBA loan basics
Short answer
Interest rates for SBA 7(a) loans are typically variable, tied to a base rate like the Prime Rate, plus a lender's spread, and capped by the SBA.
The SBA sets maximum allowable interest rates for 7(a) loans, which are tied to a published base rate (such as the Prime Rate, SOFR, or the SBA Optional Peg Rate) plus a negotiated spread charged by the lender. The spread typically depends on the loan amount and repayment term, and is capped by the SBA to ensure affordability for small businesses.
If the Prime Rate is 8.50% and a lender offers a loan at Prime + 2.75%, the borrower's initial interest rate would be 11.25%. This rate would adjust periodically (e.g., quarterly) based on changes in the Prime Rate.
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 2026-06-13. 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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