September 11, 2023
Main Street Monday – New Simplified Secondary Market Late Payment Penalty Calculations
Starting this month, all 1502 secondary market payments with a late penalty assessed will use a simplified one-part calculation:
$100 or 5% of the Remitted Amount (whichever is greater of the two)
There is still a $5,000 cap per lender per billing cycle. Lenders receive late penalty bills on or around the 20th of each month for the prior month’s due date. Penalties are due to the FTA with the next monthly Form 1502. Outstanding late penalty bills are still due as originally assessed and SBA maintains the right to withhold from a future secondary market loan settlement or any payment due to the lender to offset outstanding late penalty fees.
SBA Form 1502 Due Date
SBA Form 1502 loan and payment reporting for 7(a) loans is due on the 3rd calendar day of the month or the next business day of the month if the 3rd is not a business day. There is a grace period of an additional two business days after the due date. If the FTA does not receive the Lender remittance including complete payment information by the second business day after the FTA due date, the lender must pay a late penalty.
Below is a sample calculation for a secondary market payment of $6,500 due to FTA on SBA Form 1502 by 9/7/2023. The FTA received the lender late payment on or after 9/8/2023.
|MAX ($100(0.05 X $6,500))