Glossary · The loan itself
Basis Point(bp)
In short
A basis point is one-hundredth of a percentage point (0.01%). It's used to describe small changes in interest rates or other financial percentages.
What it means in a deal
Your SBA 7(a) loan's interest rate is often quoted as a spread over a base rate like WSJ Prime or Term SOFR. For example, a spread of 250 basis points means 2.50% above the base rate. Understand how basis points affect your total interest cost.
Related terms
Common questions about Basis Point
- What is the typical starting point to find an SBA 7(a) lender?
- What is the typical starting point to find an SBA 7(a) lender for a business acquisition?
- At what point in the loan term does the prepayment penalty typically no longer apply for an SBA 7(a) loan?
- What are the main points a lender considers when evaluating management experience for a 7(a) acquisition loan?
- What specific data points, beyond the loan amount, are most critical for matching the final executed loan documents to ensure guaranty validity?
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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