Glossary · Doing the deal
Interest Rate Modification
In short
This is when the interest rate on your SBA loan changes, usually for variable-rate loans. As a buyer, you need to understand how your rate can fluctuate and what triggers these changes.
What it means in a deal
SBA 7(a) loans can have either a fixed or variable interest rate. If your loan has a variable rate, it will be tied to a base rate like WSJ Prime or Term SOFR plus a spread, and will adjust periodically. Understand the terms of your note, especially when and how your payments can change. Plan for potential rate increases in your cash flow projections.
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 Modification
- 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?
- How often can the interest rate change on my variable rate SBA 7(a) loan?
- Can a lender unilaterally increase the interest rate on a variable rate 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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