Glossary · Doing the deal
Hedging Strategy
In short
A financial technique used to offset potential losses from market fluctuations, such as rising interest rates on a variable-rate loan. Buyers can use it to manage risk.
What it means in a deal
With a variable-rate SBA loan, your payments can increase if interest rates rise. A hedging strategy, like an interest rate swap or cap, could fix your rate or limit its upside. While less common for small SBA loans due to cost and complexity, larger deals might explore it to mitigate interest rate risk and stabilize cash flow.
Related terms
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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