Rule2022-16162
Maximum Allowable 7(a) Fixed Interest Rates
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 1, 2022
Effective
August 1, 2022
Issuing agencies
Small Business Administration
Abstract
This document announces the maximum allowable fixed interest rates for 7(a) guaranteed loans, except for Export Working Capital (EWCP) Loans.
Full Text
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<title>Federal Register, Volume 87 Issue 146 (Monday, August 1, 2022)</title>
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[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 [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-16162]
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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. 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: <a href="/cdn-cgi/l/email-protection#8aede3e4edeff8a4ebe6e6efe4caf9e8eba4ede5fc"><span class="__cf_email__" data-cfemail="3f585651585a4d115e53535a517f4c5d5e11585049">[email protected]</span></a>; or the Lender Relations
Specialist in the local Small Business Administration (SBA) District
Office. The local SBA District Office may be found at <a href="https://www.sba.gov/tools/local-assistance/districtoffices">https://www.sba.gov/tools/local-assistance/districtoffices</a>. 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 <a href="https://catran.sba.gov/ftadistapps/ftawiki/downloadsandresources.cfm">https://catran.sba.gov/ftadistapps/ftawiki/downloadsandresources.cfm</a>.
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
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