Glossary · The loan itself
SBA Optional Peg Rate
In short
An alternative base rate that lenders can use for variable-rate SBA loans, instead of the WSJ Prime Rate or Term SOFR. It's set by the SBA and adjusts periodically, impacting your loan's interest rate.
What it means in a deal
For variable rate SBA 7(a) loans, your interest rate is calculated as a base rate (often WSJ Prime or Term SOFR) plus a spread. The SBA Optional Peg Rate is another allowable base rate. Understand which base rate your lender is using and how frequently it adjusts, as this directly affects your monthly principal and interest payments.
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 SBA Optional Peg Rate
- What is the difference between Prime Rate and the SBA optional peg rate for 7(a) loans?
- What alternative base rates are available for variable-rate 7(a) loans besides the Wall Street Journal Prime rate?
- 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?
- What is the Wall Street Journal Prime Rate's role in SBA 7(a) loan interest rates?
- Are SBA 7(a) loan interest rates typically fixed or variable, and what base rate index is commonly used?
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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