Glossary · The loan itself
Interest Rate Caps
In short
These are maximum allowable interest rates set by the SBA for variable rate 7(a) loans, protecting borrowers from excessively high rate increases.
What it means in a deal
While your loan will have a variable rate tied to an index, the SBA sets a maximum cap the lender can charge, typically Prime + 6.5%. This provides some protection against extreme rate hikes. Always confirm your loan's specific cap.
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 Caps
- How does the SBA ensure that lenders adhere to specific interest rate caps on 7(a) loans?
- Are there caps on the interest rates lenders can charge for SBA 7(a) loans?
- 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?
- How often can the interest rate on a variable-rate SBA 7(a) loan adjust?
- How often can the interest rate change on a variable-rate SBA 7(a) loan?
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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