Can an SBA loan be priced off SOFR or a Treasury rate?
Short answer
Yes. Since March 1, 2026, variable 7(a) loans can use SOFR, the 5-year Treasury Note rate or the 10-year Treasury Note rate. Under SOP 50 10 8.1, Appendix 18, the all-in rate is still capped at Prime plus the spread for the loan size.
In this answer, SOFR means Secured Overnight Financing Rate.
SBA Procedural Notice 5000-875051 (effective March 1, 2026) added three Alternative Base Rates and called them permanent additions to the program. SOP 50 10 8.1, Appendix 18 carries them forward. The options are SOFR, the 5-year Treasury Note rate or the 10-year Treasury Note rate.
How each is read
- Secured Overnight Financing Rate (SOFR): the daily rate reported for the first business day of the month, as identified by the Federal Reserve Bank of New York. Lenders may keep established in-house SOFR references of 30 days or less.
- Treasury rates: the Federal Reserve's Select Interest Rates, Treasury constant maturities, for the final business day of the prior month.
The cap still runs off Prime
An Alternative Base Rate does not raise your limit. The base rate plus spread cannot exceed Prime plus the spread for your loan size. That limit is Prime plus 3.0 to 6.5 percentage points, depending on loan size (Appendix 18, Para. A.2).
Secondary market limit
The notice said these loans would not be available for secondary market sales at that time, and that SBA would evaluate demand (p. 6). SOP 50 10 8.1 does not restate that sentence. A lender that plans to sell the guaranteed portion may not offer these rates, so availability varies by lender.
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