Glossary · The loan itself
SOFR ABR
In short
An acronym for Secured Overnight Financing Rate, Adjusted Base Rate, which is a common index used to determine the variable interest rate on SBA 7(a) loans. It fluctuates daily, impacting your monthly payment.
What it means in a deal
Most SBA 7(a) loans have variable interest rates tied to a base rate plus a spread. SOFR ABR is the current standard base rate for new SBA loans, replacing LIBOR. This means your interest payments will go up or down with market rate changes, so you need to factor this variability into 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 SOFR ABR
- What are the specific requirements for an alternative base rate, like SOFR, to be used for a 7(a) variable rate loan?
- If a lender wishes to use SOFR as a base rate for a variable rate 7(a) loan, what specific documentation is required?
- Can a lender change the base rate option (e.g., from Prime to SOFR) for a variable rate 7(a) loan after closing?
- Are U.S. citizens residing abroad eligible to apply for an SBA 7(a) loan?
- What are specific requirements for a U.S. citizen residing abroad to be an eligible 7(a) borrower?
- How does a lender confirm an owner's U.S. citizenship if they were born in a U.S. territory or abroad to U.S. parents?
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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