Glossary · The loan itself
Interest
In short
The cost of borrowing money, expressed as a percentage of the principal loan amount, paid periodically by the borrower to the lender.
What it means in a deal
Your SBA 7(a) loan will have an interest rate, typically variable and tied to the Wall Street Journal Prime Rate or Term SOFR plus a lender's spread. This rate determines a significant portion of your monthly loan payment. Understand how it's calculated and how it can change your debt service.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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 Interest
- What happens to the interest rate on an SBA 7(a) loan if general market interest rates go down significantly?
- Can a full standby seller note be interest-bearing if interest is deferred until after the SBA loan is repaid?
- What is the difference between a fixed interest rate and a variable interest rate on an SBA 7(a) loan?
- How are SBA 7(a) loan interest rates determined?
- What defines 'insurable interest' for a business life insurance policy?
- Are SBA 7(a) loan interest rates fixed or variable?
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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