[Federal Register Volume 91, Number 27 (Tuesday, February 10, 2026)]
[Rules and Regulations]
[Page 5805]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-02660]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 91, No. 27 / Tuesday, February 10, 2026 / 
Rules and Regulations

[[Page 5805]]



SMALL BUSINESS ADMINISTRATION

13 CFR Part 120


7(a) Alternative Base Rate Options

AGENCY: U.S. Small Business Administration.

ACTION: Notification.

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SUMMARY: SBA is introducing alternative base rate options for use with 
variable interest rate loans made under the 7(a) Loan Program. The 
alternative base rate options are also available for use under any 7(a) 
pilot loan programs, unless expressly prohibited.

DATES: Implementation Date: The 7(a) alternative base rates will be 
effective March 1, 2026, and will remain in effect until further 
notice.

FOR FURTHER INFORMATION CONTACT: For further information, contact 
Daniel Pische, Director, Office of Financial Assistance, Office of 
Capital Access, Small Business Administration, (202) 205-7119 or 
sba.gov">Daniel.Pische@sba.gov. 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. Lenders can 
submit questions on the 7(a) Alternative Base Rate options to 
sba.gov">7aQuestions@sba.gov.

SUPPLEMENTARY INFORMATION:

I. 7(a) Alternative Base Rate Options

    A 7(a) Lender may use a variable rate of interest for guaranteed 
loans. Currently, a 7(a) Lender may use either the Prime rate or the 
Optional Peg Rate as the base rate when determining the interest rate 
for such loans. Per 13 CFR 120.214(c), SBA is permitting the use of 
three ``Alternative Base Rate'' options (in addition to the Prime rate 
and the Optional Peg Rate) for loans made with a variable interest rate 
under the SBA 7(a) Loan Program: the 5-year Treasury Note Rate, the 10-
year Treasury Note Rate, and the Secured Overnight Funding Rate (SOFR) 
(collectively, ``Alternative Base Rates''). Lenders choosing to use one 
of the Alternative Base Rates must follow the guidance provided in SOP 
50 10 found on sba.gov, which establishes the maximum interest rate 
allowed for a loan based on its amount. When using one of the 
Alternative Base Rate options, the maximum interest rate that can be 
charged by the Lender shall not exceed Prime plus the allowed spread 
for that loan amount.

Treasury Rates

    The 5-year, and 10-year Treasury Note Rates that 7(a) Lenders may 
use as Alternative Base Rates will be adjusted monthly and based on the 
market rate at 5:00 p.m. Eastern on the final business day of the 
previous month.

Secured Overnight Funding Rate (SOFR)

    SBA is allowing Lenders to use the Secured Overnight Financing 
Rate. SBA recognizes that financial institutions use a range of SOFR 
products to deliver an equivalent reference rate (e.g., 30-day term 
SOFR and 30-day Average SOFR). Lenders may continue to use their 
established in-house SOFR reference rates of 30 days or less, as these 
rates closely correlate with the daily SOFR rate. The amount of 
interest SBA will pay to a Lender following a default will be 
calculated based on the daily SOFR rate reported by the Federal Reserve 
Bank of New York and published by SBA on a monthly basis.
    SBA will publish the 7(a) Alternative Base Rate options on SBA's 
website at https://catran.sba.gov/ftadistapps/ftawiki/ on a monthly 
basis, along with the Prime rate and SBA Optional Peg Rate.

    Authority: 15 U.S.C. 636(a)(4)(A) and 13 CFR 120.214(c).

Thomas Kimsey,
Associate Administrator, Office of Capital Access.
[FR Doc. 2026-02660 Filed 2-9-26; 8:45 am]
BILLING CODE 8026-09-P