Glossary · Reading the business
Interest Rate Risk
In short
Interest rate risk is the potential for changes in market interest rates to negatively affect your loan payments. This risk primarily applies to variable rate loans.
What it means in a deal
If your SBA 7(a) loan has a variable interest rate, your monthly payment will fluctuate with market rates. Higher rates mean higher payments, which can reduce your cash flow after debt service and impact the business's profitability. Assess the business's ability to absorb potential rate increases when choosing your loan type.
Related terms
Common questions about Interest Rate Risk
- 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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