SBA loan basics
Short answer
The base rate is a fluctuating index (like the Wall Street Journal Prime Rate), and the spread is a fixed percentage added on top by the lender, which together determine your variable interest rate.
SBA 7(a) loans typically have variable interest rates. The base rate adjusts periodically, reflecting market conditions, while the spread remains constant throughout the loan term, representing the lender's margin and risk assessment.
If the WSJ Prime Rate (base rate) is 8.50% and your loan has a 2.75% spread, your interest rate would be 11.25%. If the Prime Rate later drops to 8.00%, your rate would become 10.75%.
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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