For commercial lending if you are on a Floating Prime Rate option and if Prime changes, the rate will adjust accordingly. Having said that I suggest you ask directly the person you are dealing with at the institution to ensure it aligns with their respective policies.

I would also recommend including two additional provisions in both the term sheet and the definitive docs: (1) a clear specification of the frequency at which the rate adjustments will occur, and (2) a precise definition of the timing or effective date for each rate adjustment. Addressing these points explicitly will help ensure alignment and mitigate the risk of ambiguity during the term of the loan/relationship.