Glossary · The loan itself
Spread over Prime(lender margin)
In short
The lender's markup on top of Prime — the only part of your rate that's negotiable. SBA caps how high it can go.
What it means in a deal
Your 7(a) rate is Prime plus this spread. SBA regulation caps the spread by loan size (3.0% on loans over $350K, more on smaller loans), but lenders can and do price under the cap on strong files. This is where shopping pays off: on a $1M loan, a quarter-point lower spread is roughly $125 a month. Ask two or three lenders for their spread in writing and let them compete.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
Last checked 2026-06-16. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Spread over Prime
- What is the maximum interest rate spread a lender can add over the base rate for an SBA 7(a) loan?
- What is the difference between the base rate and the spread on an SBA 7(a) loan?
- What are the maximum allowable interest rates for variable rate 7(a) loans, including the permissible spread?
- Does my business need to show consistent revenue over several years?
- What is the 'Prime Rate' when talking about SBA 7(a) loan rates?
- What is the difference between Prime Rate and an SBA 7(a) loan rate?
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 2026-06-16 · 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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