How often can the rate on an SBA variable-rate loan change?
Short answer
A variable 7(a) rate can adjust no more often than monthly under 13 CFR § 120.214(a). Your Note sets the actual schedule, and SBA says many lenders use the calendar quarter.
The first change may occur on the first calendar day of the month after initial disbursement. After that, changes may occur no more often than monthly (13 CFR § 120.214(a)). Your lender can choose a longer schedule. SOP 50 10 8.1, Appendix 18 says many lenders use the calendar quarter, especially those selling the guaranteed portion.
How an adjustment is calculated
- The new rate takes effect on the first calendar day of the adjustment period.
- It uses the base rate in effect on the first business day of that period.
- The same spread is used for every adjustment (Appendix 18, Para. A.2).
The rate can take effect before the number is published. In SBA's example, the first of the month is a Sunday. The base rate is Monday's Prime, reported on Tuesday.
What cannot change without your consent
The Note must state the adjustment frequency. That period may not change without your written consent (Appendix 18, Frequency of Interest Rate Adjustment, about p. 398).
SBA Express can differ
Express lenders may use the same change intervals they use on similar non-SBA loans (Appendix 18, Para. B.3, p. 401). The rate still cannot exceed the SBA maximum. Check your Note for your actual schedule.
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