Glossary · The loan itself
London Interbank Offered Rate(LIBOR)
In short
LIBOR was a benchmark interest rate used globally for various financial products, including some variable-rate loans. It has been phased out and replaced by other reference rates.
What it means in a deal
While historically used for some variable-rate SBA loans, LIBOR has been discontinued. New SBA 7(a) loans with variable rates now typically use WSJ Prime or Term SOFR as their base rate. If you encounter an older loan still referencing LIBOR, be aware that it has transitioned to an alternative rate as mandated by regulators.
Related terms
Common questions about London Interbank Offered Rate
- What factors influence the specific interest rate I will be offered for my SBA 7(a) loan?
- Is it true that SBA loans are typically only offered by large national banks?
- What alternative base rates are available for variable-rate 7(a) loans besides the Wall Street Journal Prime rate?
- What happens if the primary business assets offered as collateral are valued significantly less than the loan amount?
- What is the 'Prime Rate' when talking about SBA 7(a) loan rates?
- What specific alternative base rates are permissible for variable rate 7(a) loans?
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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