SBA Guarantee Fee: An Overview and Cost Breakdown
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What is the SBA guarantee fee?
How much do you need?
How much are SBA guarantee fees?
Loan amount | SBA guarantee | Guaranteed loan amount | SBA guarantee fee if loan term is 12 months or less | SBA guarantee fee if loan term is more than 12 months |
---|---|---|---|---|
$150,000 or less | 85% of the loan. | $127,500. | 0.25%. | 2%. |
$150,001 to $700,000 | 75% of the loan. | $112,500.75 to $525,000 | 0.25% | 3%. |
$700,001 to $5,000,000 | 75% of the loan.* | $525,000.75 to $3,750,000. | 0.25%. | 3.50% of the guaranteed portion of the loan up to and including $1,000,000, plus 3.75% of the guaranteed portion of the loan over $1,000,000. |
Note about 7(a) loans issued prior to March 27, 2025
- Loans of $1,000,000 or less: 0.0%.
- Loans of $1,000,001 to $5 million (term of 12 months or less): 0.25%
- Loans of $1,000,001 to $5 million (term of more than 12 months): 3.50% of the guaranteed portion of the loan up to and including $1,000,000, plus 3.75% of the guaranteed portion of the loan over $1,000,000.
How are SBA guarantee fees calculated?
Other SBA loan fees
SBA 7(a) loan fees
Type of fee | Cost | Overview |
---|---|---|
Packaging fee | Lenders may charge packaging fees consistent with those they charge on similarly-sized, non-SBA commercial loans. If the fees are charged based on a percentage of the loan amount, they may not exceed what the lender typically charges for similar loans, or the following, whichever is less:
| Fee charged by a lender or broker for putting together your loan application. |
Flat fee | $2,500. | The SBA permits lenders to charge this flat fee on each loan. |
Extraordinary servicing fee | No more than 2% per year on the outstanding loan balance. | Fee charged by the lender for monitoring the value of collateral or for other special servicing needs. |
Out-of-pocket expense fee | Varies. | Fee charged by the lender for appraising collateral, assessing environmental costs and other closing costs. |
Late payment fee | No more than 5% of the payment amount. | Fee charged by the lender when the borrower misses a scheduled loan payment by more than 10 days. |
Prepayment fee | 5% of the prepayment amount during the first year, 3% the second year and 1% the third year. | Penalty that the SBA charges when a borrower pays 25% or more of the loan in any one year during the first three years after disbursement. This fee applies only to 7(a) loans with a term of 15 years or longer. |
SBA 504 loan fees
Type of fee | Cost | Overview |
---|---|---|
Borrower's deposit | $2,500 or 1% of the CDC portion of the loan. | A fee that the CDC can charge at the time of application. If the application is declined, the deposit will be refunded within 10 business days. If the application is approved, it can be applied toward the processing fee. |
Processing or packaging fee | No more than 1.5% on the CDC portion of the loan. | Fee charged by the CDC for processing your loan application. |
Closing fee | Varies. | Fee charged by the CDC to reimburse itself for appraisals, legal work and other miscellaneous closing costs. |
Annual servicing fee | 0.4405% of the outstanding loan balance. | Annual fee charged by the CDC to cover ongoing overhead costs associated with your loan. |
Late payment fee | 5% of the late payment or $100, whichever is greater. | Fee charged by the CDC when a borrower makes a loan payment after the 15th of the month. |
Underwriter’s fee | 0.375% on 10-year loans; 0.4% on 20- and 25-year loans. | Fee charged by the CDC or their agent for evaluating your loan application. |
Prepayment fee | The prepayment penalty is based on the principal balance of the loan multiplied by the interest rate. The penalty declines by 1/10th of the interest rate annually for the first 10 years. | Fee charged by the CDC when a borrower pays off their loan early. |
Learn more about getting an SBA loan
- Find out whether your business can qualify for an SBA loan.
- Here are the differences between 7(a) and 504 loans.
- Learn how long it takes to apply for an SBA loan and receive funds.
Are SBA guarantee fees being waived?
Are SBA guarantee fees tax-deductible?
What does an SBA guarantee mean?
Article sources
-
U.S. Small Business Administration. SOP 50 10 Lender and Development Company Loan Programs. Accessed Mar 31, 2025.1. -
U.S. Small Business Administration. 504 Fees Effective During Fiscal Year 2025.2. -
U.S. Small Business Administration. SBA Information Notice: Revising 7(a) Fees (including the 7(a) WCP Pilot) for Fiscal Year 2025. Accessed Mar 31, 2025.3.