Can the interest rate on my SBA loan change after approval?
Short answer
Yes, before first disbursement, if you consent in writing and the new rate stays within the maximum at application. The lender may change the rate or switch between fixed and variable, under SOP 50 10 8.1, Appendix 18.
Yes, under SOP 50 10 8.1, Appendix 18, Post-Approval Changes to the Interest Rate (about p. 397). Ordinary adjustments on a variable rate happen under the Note and are separate from these changes.
Between approval and first disbursement
The lender may change the initial Note rate, base rate or spread. It may also switch the loan between fixed and variable. Three conditions apply:
- The new rate cannot exceed the maximum allowable rate at the time of the loan application.
- You must consent in writing, separately from signing the loan documents.
- The lender must notify SBA's processing center or record the change in SBA's loan system.
SBA's own example is a borrower who asks to move from variable to fixed after Prime changes, before disbursement.
After disbursement
On a variable-rate loan, the lender may change the base rate or spread only under a method permitted when the loan was approved. The change must fit the rate regulations in effect at approval. The lender needs your written agreement and must notify SBA or record the change.
The spread in your Note cannot change during the loan without your written agreement (Appendix 18, Para. A.1). SBA's servicing manual, SOP 50 57, has further detail.
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