Glossary · The loan itself
Interest rate
In short
The cost of borrowing money, expressed as a percentage of the principal. This directly impacts your monthly loan payments and the total cost of your 7(a) loan.
What it means in a deal
7(a) loans typically have variable interest rates, usually pegged to the WSJ Prime Rate or Term SOFR plus a spread. Understand how often it adjusts and what the maximum spread is allowed by the SBA. A higher rate means higher debt service, impacting your cash flow after 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 rate
- What happens to the interest rate on an SBA 7(a) loan if general market interest rates go down significantly?
- What is the Wall Street Journal Prime Rate's role in SBA 7(a) loan interest rates?
- What are the maximum allowable interest rates for variable rate 7(a) loans, including the permissible spread?
- What is the difference between a fixed interest rate and a variable interest rate on an SBA 7(a) loan?
- How is the interest rate cap determined for a variable rate 7(a) loan?
- Are SBA 7(a) loan interest rates typically fixed or variable, and what base rate index is commonly used?
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.
See which SBA lenders would fund your deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to approve a 7(a) like yours and flag what trips up approval.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.