SBA sets the ceiling; the lender sets the rate
The SBA caps how much a lender can charge on a 7(a) loan — a base rate plus a maximum spread that depends on loan size, and separate maximums for fixed-rate loans. Within those limits, the lender decides the rate and whether to offer fixed, variable or both. Check sba.gov for the current maximums before comparing offers.
Most 7(a) loans float
Variable 7(a) loans commonly reference Prime and adjust on a schedule set in the note. Fixed options exist at some lenders, often priced higher to cover the lender's rate risk.
Questions to ask a lender
- Which base rate, and what spread?
- How often does it adjust, and is the payment re-amortized?
- Is there a fixed-rate option, and at what price?
- What guarantee fee and packaging fees apply?
- Are there prepayment penalties in the first years?
Plan for the reset
Because many 7(a) terms run 10 years for business purposes and up to 25 for real estate, a floating rate has time to move a lot. Test your cash flow at a rate 2–3 points higher before committing.
Estimates only. Results vary. No guarantee of approval, rates or savings.
Examples use hypothetical numbers. Educational content, not financial, legal or tax advice. Profit Theory is not a lender; lenders set their own requirements and make all credit decisions.