SBA Hot Topic Tuesday — Annual Service Fee and Upfront Guaranty Fee for 7(a) Loans
November 26, 2019
By Caity Witucki
Contributing Editor, SBA Hot Topic Tuesday
SBA Hot Topic Tuesday — Annual Service Fee and Upfront Guaranty Fee for 7(a) Loans
The SBA has released a notice announcing the annual service fee and upfront guaranty fee for all 7(a) loans approved during the period covered by the continuing resolution.
The following fees are effective for all 7(a) loans approved November 22, 2019, through December 20, 2019:
- The annual service fee will be 0.55% (55 basis points) of the guaranteed portion of the outstanding balance of the loan. Lenders must manually adjust this fee in the current Authorization Wizard.
- The upfront guaranty fee will continue to depend on the loan amount and the maturity of the loan.
- For loans with a maturity that exceeds 12 months, the fees are:
- For loans of 150,000 or less: 2% of the guaranteed portion. Lenders may continue to retain no more than 25% of this fee (i.e., at least 1.5% must be remitted to SBA).
- For loans of $150,001 to $700,000: 3% of the guaranteed portion.
- For loans of $700,001 to $5,000,000: 3.5% of the guaranteed portion up to $1,000,000, plus 3.75% of the guaranteed portion over $1,000,000.
- For loans with a maturity that exceeds 12 months, the fees are:
- For loans with a maturity of 12 months or less, the fee is 0.25% of the guaranteed portion.
SBA is unable to provide any upfront guaranty or annual service fee relief for any 7(a) loans approved during the continuing resolution period regardless of the size of the loan, location of the small business, or any other prior relief initiatives (including veteran-owned small business fee relief under SBA Express).
When two or more SBA-guaranteed loans are approved within 90 days of each other, the guaranty percentage and upfront guaranty fee are determined based on the aggregate amount of the loans. Lenders are not permitted to split loans for the purpose of avoiding fees. This represents no change to the current policy.
For specific guidance on when all 7(a) loan fees are due, see SOP 50 10 5(k), Subpart B, Chapter 3, Paragraph V.B (Pages 160-161)
Questions concerning this fee schedule should be directed to the Lender Relations Specialist in the local SBA Field Office. A list of local SBA Field Offices may be found on the Local Assistance Page of the SBA’s website.
Sources:
SBA Information Notice (Control No.: 5000-19023)
SOP 50 10 5 (k)
Continuing Resolution Bill
SBA Local Assistance