Which base rates can a lender use on a variable-rate SBA loan?
Short answer
A 7(a) lender can use the Prime rate or the SBA Optional Peg Rate. Since March 1, 2026 it can also use SOFR, the 5-year Treasury Note rate or the 10-year Treasury Note rate. SOP 50 10 8.1, Appendix 18, Para. A lists them.
In this answer, SOFR means Secured Overnight Financing Rate.
SOP 50 10 8.1, Appendix 18, Para. A (p. 395) and 13 CFR § 120.214(c) list the acceptable base rates. The Note must name the one your loan uses and where it is published.
The Prime rate
Prime is the rate in effect on the first business day of the month, as shown in a national financial newspaper or website. SBA's examples use the Wall Street Journal. Some newspaper websites publish the prior day's rate, so the SOP tells lenders to check. Prime is 7.00% as of Nov 10, 2026.
The SBA Optional Peg Rate
This is a weighted average of rates the federal government pays on loans with maturities similar to the average 7(a) loan. SBA calculates it and publishes it quarterly in the Federal Register.
How the starting rate is set
The base rate on the first business day of the month sets the initial rate for any complete application SBA receives that month. SBA treats the receipt date as the date the loan is approved and assigned an SBA loan number. The initial Note rate cannot exceed SBA's maximum.
Base rates are rounded to two decimal places. SBA Express lenders have more latitude on base rates (Appendix 18, Para. B.3).
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