SBA loan basics
Short answer
Lenders determine the SBA 7(a) loan interest rate by adding a 'lender's spread' to a base rate, usually the Wall Street Journal Prime Rate, while staying within SBA-mandated maximums.
The interest rate for an SBA 7(a) loan is composed of a base rate (such as the Wall Street Journal Prime Rate, or a permitted alternative) plus a 'lender's spread' or markup. This spread is determined by the lender based on their assessment of the borrower's creditworthiness and the loan's risk, but it cannot exceed the maximum spread allowed by the SBA, which varies by loan amount and term.
A lender assesses the borrower's creditworthiness and the overall risk of a $200,000 loan. They decide to add a 2.50% spread to the current Wall Street Journal Prime Rate of 8.50%, resulting in an annual interest rate of 11.00%, which is within SBA maximums for that loan size and 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
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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