August 2, 2022
SBA Hot Topic Tuesday – New Maximum Fixed Rates for 7(a) Guaranteed Loans
Effective on the first day of August, SBA published a notice for a regulatory rule that announces the maximum allowable fixed interest rates for 7(a) guaranteed loans. The final rule “removed or revised various regulations governing the agency’s business loan programs that were considered obsolete, unnecessary, ineffective, or burdensome.”
These are the rates listed in the notice:
• The allowable fixed rate for 7(a) loans of $25,000 or less is prime plus 800 basis points. With the prime rate currently being 5.5%, the maximum rate is 13.5%.
• For loans over $25,000 but no more than $50,000 the allowable spread for a fixed rate is prime (5.5%) plus 700 basis points. This makes the maximum rate 12.5%.
• Loans that are more than $50,000 up to and including $250,000, it is prime plus 600 basis points. The maximum rate is 11.5%.
• Loans over $250,000 have a maximum fixed rate of prime 500 basis points, so the maximum fixed rate 10.5%.
These rates apply to all 7(a) fixed rate loans including SBA Express loans, Export Express loans, and the Community Advantage Pilot Program. Export Working Capital Program loans are not included in these changes.
Periodic revisions to the maximum allowable fixed interest rate for 7(a) guaranteed loans will be published by the SBA.
For an in-depth discussion of this new rule and other guidelines lenders must follow for variable rate and fixed rate loans, join Bob Coleman and Lance Sexton tomorrow for the “Are you Compliant with SBA’s SOP Regulations about Prime Interest Rate Increases?” webinar.
Fixed Rate Announcement