In case you missed it, effective July 28, 2022, the Prime Rate increased from 4.75% to 5.50%. As a result, it is prudent for U.S. Small Business Administration (“SBA”) lenders to understand and utilize the appropriate Prime Rate when preparing SBA 7(a) loan documents.

For a reference on how the SBA governs interest rates that SBA lenders are allowed to charge on SBA 7(a) loans, review our recent article from the June 16, 2022 Prime Rate increase setting forth rules and providing examples for variable rate loans (click here to read).

The Prime Rate increase also applies to fixed rate SBA loans. As set forth in SOP 50 10 6, the maximum allowable fixed interest rate will be the Prime Rate in effect on the first business day of the month, plus any allowable spread over Prime (click here to navigate to SOP 50 10 6, page 240).