September 28, 2021
Hot Topic Tuesday – Update on 7(a) Fee Waivers
On September 24th, a lender received an email from the Citrus Heights SBA field office declaring that the 7(a) fee waivers from the CARES Act had been exhausted as of September 23rd:
“PLEASE NOTE – As of 9/23/21 funding from the CARES Act has been exhausted. Therefore, a guarantee fee, as well as the annual servicing fee, will be charged on this loan. The 90% guarantee, however, remains in place through 9/30/21. Please adjust your loan structure to reflect how the guarantee fee will be paid.
Sorry for the inconvenience we may have caused.”
Subsequently, the SBA head office sent an email correcting this information: “Fee waiver is still in effect.” There are still funds from the CARES Act, and the 7(a) fees are being waived until September 30th or the funds are expended.
As of right now, the SBA recommends that lenders disregard any messages stating that guaranty and servicing fees will be due. We believe that the CARES Act will be able to finance 7(a) fee waivers throughout the end of the fiscal year.
Starting October 1st, the 7(a) program will begin charging guarantee fees and servicing fees. All loans $350,000 or less will have no guarantee or servicing fees going forward. For 7(a) loans that are over $350,000 to $1 million have an annual fee of 0.49%. This fee will increase to 0.55% for loans above $1 million. If the loan has a maturity of twelve months or less, the guarantee fee will be 0.25%. The guarantee fee will range from 2.77% to 3.75% if the loan’s maturity is more than twelve months.
SBA Procedural Notice