The prime rate is the benchmark interest rate banks charge their most creditworthy customers, tracked publicly as the WSJ Prime Rate (6.75% in July 2026). SBA 7(a) loans are almost always variable, priced as Prime + a lender spread, so your interest cost rises and falls with Prime.
How your SBA rate is built
| Component | Rate |
|---|---|
| WSJ Prime (July 2026) | 6.75% |
| + Lender spread (loans over $350k) | up to 3.00% |
| Your rate | ~9.75% |
The SBA caps the maximum spread, and because the loan is variable, a change in Prime changes your payment and your DSCR mid-loan.
Why it matters when buying a business
Since SBA loans float on Prime, a rate move directly changes your monthly payment and the DSCR cushion you underwrote. When modeling a deal, stress-test a higher Prime so a rate rise doesn't push you below 1.15×. Track it alongside the guaranty fee and amortization term.
