[Federal Register Volume 87, Number 146 (Monday, August 1, 2022)]
[Rules and Regulations]
[Page 46883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16162]



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 Rules and Regulations
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  Federal Register / Vol. 87, No. 146 / Monday, August 1, 2022 / Rules 
and Regulations  

[[Page 46883]]



SMALL BUSINESS ADMINISTRATION

13 CFR Part 120


Maximum Allowable 7(a) Fixed Interest Rates

AGENCY: U.S. Small Business Administration.

ACTION: Notification announcing the maximum allowable 7(a) loan fixed 
interest rates.

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SUMMARY: This document announces the maximum allowable fixed interest 
rates for 7(a) guaranteed loans, except for Export Working Capital 
(EWCP) Loans.

DATES: This action is effective August 1, 2022.

FOR FURTHER INFORMATION CONTACT: Ginger Allen, Chief, 7(a) Loan Policy 
Division, Office of Financial Assistance, U.S. Small Business 
Administration, 409 Third Street SW, Washington, DC 20416; telephone: 
(202) 205-7110; email: [email protected]; or the Lender Relations 
Specialist in the local Small Business Administration (SBA) District 
Office. The local SBA District Office may be found at https://www.sba.gov/tools/local-assistance/districtoffices. The phone number 
above may also be reached by individuals who are deaf or hard of 
hearing, or who have speech disabilities, through the Federal 
Communications Commission's TTY-Based Telecommunications Relay Service 
teletype service at 711.

SUPPLEMENTARY INFORMATION: Agency regulations at 13 CFR 120.213(a), 
Fixed Rates for Guaranteed Loans, state that ``[a] loan may have a 
reasonable fixed interest rate. SBA periodically publishes the maximum 
allowable rate in the Federal Register.''
    On November 6, 2018, SBA published a Federal Register Notice (83 FR 
55478) establishing that the maximum allowable fixed interest rate for 
7(a) loans (including SBA Express and Export Express loans, and 
excluding Export Working Capital Program (EWCP) loans) was the Fixed 
Base Rate, plus a maximum allowable spread based on the term of the 
loan, plus an additional spread for loans $50,000 or less as provided 
in 13 CFR 120.215. The 2018 notice states that maximum allowable fixed 
rates are 600 basis points for loans of $25,000 or less plus the 200 
basis points permitted by 13 CFR 120.215; 600 basis points for loans 
over $25,000 but not exceeding $50,000, plus the 100 basis points 
permitted by 13 CFR 120.215; 600 basis points for loans greater than 
$50,000 up to and including $250,000; or 500 basis points for loans 
over $250,000.
    On June 30, 2022, SBA published in the Federal Register the final 
rule ``Regulatory Reform Initiative: Streamlining and Modernizing the 
7(a), Microloan, and 504 Loan Programs To Reduce Unnecessary Regulatory 
Burden'' (87 FR 38900), effective August 1, 2022. In this final rule, 
SBA removed or revised various regulations governing the agency's 
business loan programs that were considered obsolete, unnecessary, 
ineffective, or burdensome. One of the regulations removed, 13 CFR 
120.215, What interest rates apply to smaller loans?, was used as a 
basis for the maximum allowable fixed interest rates for 7(a) loans of 
$50,000 and less. The removal of 13 CFR 120.215 does not affect the 
maximum 7(a) interest rates because the regulation at 13 CFR 120.215 
was in effect when the FRN was published. However, to avoid confusion 
in the lending industry, SBA is publishing this document to confirm the 
method for calculating maximum allowable fixed interest rates for 7(a) 
loans (including fixed rate SBA Express and Export Express loans, and 
fixed rate loans made under the Community Advantage Pilot Program, but 
excluding EWCP loans).
    SBA is updating the allowable fixed interest rates for loans of 
$50,000 and less by removing the language referencing the additional 
spread permitted by 13 CFR 120.215 and stating that the allowable 
spread for fixed rate 7(a) loans of $25,000 and less is 800 basis 
points and the allowable spread for fixed rate 7(a) loans of more than 
$25,000 but not exceeding $50,000 is 700 basis points. The maximum 
allowable fixed interest rates for 7(a) loans of more than $50,000 
remain unchanged.
    The interest rates set forth in this document are applicable to all 
7(a) fixed rate loans (including SBA Express and Export Express loans, 
and loans made under the Community Advantage Pilot Program), except 
EWCP \1\ loans. This document does not affect the allowable base rates 
used for variable rate loans as described in 13 CFR 120.214(c) as 
revised in 87 FR 38900.
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    \1\ In accordance with 13 CFR 120.344(c), ``SBA does not 
prescribe the interest rates for the EWCP but will monitor these 
rates for reasonableness.''
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    Effective August 1, 2022, for any complete 7(a) loan application 
received by SBA or any request for an SBA Loan Number submitted by a 
Lender under its delegated authority (including fixed rate SBA Express 
and Export Express loans, and fixed rate loans made under the Community 
Advantage Pilot Program), except EWCP loans, the maximum allowable 
fixed interest rate will be the Prime rate in effect on the first 
business day of the month plus:
    (i) 800 basis points for loans of $25,000 or less;
    (ii) 700 basis points for loans over $25,000 but not exceeding 
$50,000;
    (iii) 600 basis points for loans greater than $50,000, up to and 
including $250,000; or
    (iv) 500 basis points for loans over $250,000.
    Future revisions to the maximum allowable fixed interest rate for 
7(a) guaranteed loans will be published periodically by SBA in the 
Federal Register and posted monthly on SBA's website at https://catran.sba.gov/ftadistapps/ftawiki/downloadsandresources.cfm.

    Authority: 15 U.S.C. 636(a)(4)(A) and 13 CFR 120.213.

John Miller,
Deputy Associate Administrator, Office of Capital Access.
[FR Doc. 2022-16162 Filed 7-29-22; 8:45 am]
BILLING CODE 8026-03-P