Glossary · The loan itself
Alternative Base Rates
In short
These are benchmark interest rates, like Term SOFR or LIBOR (phasing out), that lenders use to calculate the variable interest rate on your SBA loan. Your actual rate is this base rate plus a "spread."
What it means in a deal
Most SBA 7(a) loans are variable rate, tied to an alternative base rate. Understand which index your loan uses and how frequently it adjusts. A rising base rate will increase your monthly payments, so model for potential rate hikes.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Alternative Base Rates
- What specific alternative base rates are permissible for variable rate 7(a) loans?
- What alternative base rates are available for variable-rate 7(a) loans besides the Wall Street Journal Prime rate?
- What alternative base rate options are available for variable rate 7(a) loans?
- What are the current alternative base rate options for variable rate 7(a) loans?
- What are the current alternative base rate options available for variable rate 7(a) loans?
- What are the current alternative base rate options for variable rate 7(a) loans, besides Prime Rate?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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