Can one SBA loan have a fixed rate on part and a variable rate on the rest?
Short answer
Yes. SOP 50 10 8.1, Appendix 18 lets a lender fix the rate on either the guaranteed or unguaranteed portion and float the other. Neither rate may exceed the SBA maximum, and SBA treats the whole loan as variable.
SOP 50 10 8.1, Appendix 18, Fixed and Variable Rate Combinations (about p. 399) allows this structure. The lender may use a fixed rate on either the guaranteed or unguaranteed portion and a variable rate on the other.
The limits
- Neither rate may exceed the SBA maximum interest rate.
- If the lender uses a combination, the entire loan is considered a variable-rate loan.
- The SOP says the rate on both portions must be based on the variable rate.
Why a lender would use it
SBA gives one example. A lender may keep a variable rate on the unguaranteed portion it holds, and sell a fixed-rate guaranteed portion on the Secondary Market.
What it means for your maximum
Because the loan counts as variable, the variable caps are the reference point: Prime plus 3.0 to 6.5 percentage points, depending on loan size. The maximum fixed rate is reserved for a rate that stays in effect for the entire term (Appendix 18, Para. A.1).
What to ask your lender
Ask how the two portions combine into your payment and which portion adjusts. Your Note must state the first adjustment date and the frequency. Whether a lender offers this structure varies by lender.
Ask lending partners about your loan
Tell us the amount you need and what it is for. We refer you to lenders that may fund businesses like yours, and it costs you nothing.
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