SBA Procedural Notice 5000-875051, 7(a) Alternative Base Rate Options (published February 6, 2026, and effective March 1, 2026), announces the addition of new alternative base rate options that lenders may use for 7(a) variable rate loans receiving an SBA loan number on or after March 1.  In addition to the Prime Rate and the SBA Optional Peg Rate, which will remain available as 7(a) variable base rate options, the notice adds three alternative base rates:

  1. The Secured Overnight Funding Rate (SOFR) – based on the daily rate in effect on the first business day of the month as identified by the Federal Reserve Bank of New York.  [But per the notice:  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.]
  2. The 5-year Treasury Note Rate – based on the Federal Reserve Select Interest Rates publication for the final business date of the prior month.
  3. The 10-year Treasury Note Rate – based on the Federal Reserve Select Interest Rates publication for the final business day of the prior month. 

The notice amends SOP 50 10 8 in numerous places to incorporate these alternative base rates and to provide the requirements related to their use.  In addition, it amends the Working Capital Pilot (WCP) Program Guide to modify how SOFR is calculated for WCP purposes. 

On February 10, 2026 SBA published a Rule in the Federal Register providing formal regulatory notice of the availability of the new base rates.

It is important to note that, while the notice contains revised SOP language relating to loans being sold on the secondary market, it specifically states that “utilizing an Alternative Base Rate will not be available for secondary market sales at this time.”  However, the notice further indicates that SBA will evaluate the secondary market demand for utilizing alternative base rates, thus making it appear that this prohibition against secondary market sales of loans using the new base rates may be temporary. 

Please share your thoughts and questions about the new alternative base rates with NAGGL by emailing [email protected]. 

Finally, please note that SBA provided training on the new rate options as one of the topics covered during its inaugural SBA Lender Connect Update held on Wednesday, February 11, 2026, at 3 PM ET. You can view the recording of that session by going to SBA’s On-Demand training page, www.sba.gov/partners/lenders/training-demand.