Glossary · People and paperwork
Alternative Reference Rates Committee(ARRC)
In short
The ARRC is a group of private-market participants convened by the Federal Reserve to help transition from LIBOR to new reference rates like SOFR. This affects how variable interest rates are set for your loan.
What it means in a deal
For SBA 7(a) loans with variable interest rates, the ARRC's work means that your interest rate will likely be tied to SOFR (Secured Overnight Financing Rate) plus a spread, rather than the old LIBOR. Understand how your specific loan's variable rate is calculated before closing.
Related terms
Common questions about Alternative Reference Rates Committee
- 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 is the role of the lender's credit committee in the SBA 7(a) loan approval process?
- Are SBA 7(a) loan interest rates usually lower than traditional bank loan rates?
- How do variable interest rates on SBA 7(a) loans compare to fixed rates?
- How do SBA loan rates compare to conventional bank loan rates for business acquisitions?
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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