SBA maximum interest rate

Definition

The highest rate a lender may charge on a 7(a) loan of a given size.

Why It Matters

SBA sets the ceiling, not the bank. On a variable-rate 7(a) it is prime plus a spread that narrows as the loan grows, from 6.5 points on the smallest loans to 3 points above $350,000, so nearly every acquisition loan sits in the narrowest band. A floating quote above the line for its size is not a pricing choice the program allows. Check each term sheet against it before you compare fees.

In numbers: On a $3.6M variable-rate 7(a), the most a lender may charge is prime plus 3%, so with prime at 7% any quote above 10% is over the ceiling.