Glossary · The loan itself
Maximum Allowable Rate
In short
The highest interest rate an SBA lender is permitted to charge on a 7(a) loan, consisting of a base rate plus a spread. This caps your borrowing costs.
What it means in a deal
The SBA sets a maximum allowable interest rate for 7(a) loans, typically the Wall Street Journal Prime Rate (or Term SOFR) plus a fixed spread, depending on the loan size and term. Your lender cannot charge more than this cap. Always compare proposed rates to the current maximum to ensure you're not overpaying.
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 Maximum Allowable Rate
- What are the maximum allowable interest rates for variable rate 7(a) loans, including the permissible spread?
- How do lenders determine the maximum allowable interest rate for a variable rate 7(a) loan?
- How does a lender determine the maximum allowable interest rate for a variable-rate 7(a) loan tied to the WSJ Prime?
- What are the current allowable alternative base rate options for variable rate 7(a) loans, besides Prime Rate?
- What is the maximum allowable loan term for a 7(a) loan used solely for working capital?
- What is the specific maximum interest rate a lender can charge 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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